Demand for rental property is so high that the number of ‘would-be tenants’ outnumbers the amount of available properties, according to new research.
A survey of letting agents conducted by ARLA found that 68 per cent of them believe housing demand to be outweighing supply.
That represents an increase from Q2 2014, when the same questioned produced a similar response from 59 per cent of respondents, while just 46 per cent echoed the belief in Q3 2013.
The number of properties managed by ARLA members has also dropped, falling by six per cent from an average of 143 to 135.
Landlords are also investing in fewer new properties, with the research suggesting numbers dropped from 35 per cent to 27 per cent during the last quarter.
The number of rental property owners reportedly selling their homes also increased from 27 per cent to 32 per cent – the first time in four years that this trend has been noted.
“This quarter, we have seen demand for properties in the rental sector significantly rise, while the supply of residential rental properties has dropped,” said ARLA managing director David Cox.
“This activity has bucked the seasonal trend recorded over the past 11 years for this quarter, in which we normally see an increase in the number of new tenancies signed up.”
The survey revealed that a significant number of properties in the rental market that are put up for sale actually re-enter the sector at a later date with new owners.
16 per cent of homes have re-entered the market after being registered for sale, up from nine per cent in Q2 this year.
While there could be a number of reasons for this, many buy to let landlords will be keen to ensure properties are producing income, especially in the cases of ones which prove difficult to sell.
Tenants are also requesting more financial information about possible landlords as the number of those who ask for references from lenders has risen from seven per cent to nine per cent.
See how Countrywide provide similar data on the excessive tenants in the Buy to Let market.