Rental property supply and demand gap widens

Rental property supply and demand gap widens

The rental market started the year on the back foot, research has revealed.

Arla Propertymark’s Private Rented Sector report found the supply of rental properties fell by 8 per cent from December to January.

But demand from prospective renters rose and rent rises also increased in frequency - presenting a bleak outlook for renters in 2018.

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David Cox, chief executive of Arla Propertymark, said: "This month's results indicate that renters are in for a rough ride in 2018.

"Housing stock is falling as rising taxes continue to force established landlords out of the market and deter entry into the sector – and the volume of renters is increasing as the cost of buying a home is moving further out of reach for many.

"The fact that one in five tenants are experiencing rent increases is just another blow. Ultimately, until the prospect of investing in the buy-to-let market is more attractive for prospective landlords, and stock subsequently increases, tenants will continue to feel the burn."

The report found the number of properties letting agents managed fell by 8 per cent in January, with 184 per branch compared to 200 in December 2017

The last time supply reached a level this low was October 2017, when it stood at 182.

The gap between supply and demand widened in January with more prospective renters coming onto the market.

On average, letting agents registered 70 prospective tenants for each branch in January, compared with just 59 in December. 

One in five tenants experienced rent hikes in January, compared with 16 per cent in December but this was down year-on-year.

In January 2017, 23 per cent on tenants had their rents increased, and 30 per cent were subject to rent rises in January 2016.