Demand for rental property in the UK is growing at such a pace that five tenants are now chasing every rental property that goes on the market.
The figures come from the latest Countrywide Lettings Index for August which showed a steady increase in demand across the last 12 months.
It is reflected in August rental prices too, with 15 per cent of properties let for more than advertised, although this figure rises to 19 per cent in London – a 13-month high.
Despite this, demand is yet to reach similar levels to those of 2012, although average rent in the UK passed the £900 a month barrier for the first time in August, up £13 from the month previously.
This represents good news for landlords and buy to let investors, as rental returns are increasing alongside property values.
During the past 12 months, rents have increased by 5.1 per cent while it is London – and particularly zones 2-6 – that has led the growth.
In the capital the number of properties coming to market has remained roughly the same during the last year, but tenant numbers have grown by 12 per cent in the same period.
Beyond London and the South East, levels of demand have remained closer to the numbers of properties available, so rental increases have not reached such high levels.
“The significant level of mobility between the sale and rental markets means changes to the level of demand in the sales market will have a knock on effect in the rental market,” explained Nick Dunning, group commercial director at Countrywide.
He added that gradual cooling of the sales market has led to upward pressures on rents, as fewer tenants are leaving the sector.
“An increasing number of landlords have been able to re-let their property at a higher rate with tenants willing to meet and in some cases surpass rising asking prices,” added Mr Dunning.
The number of tenants in the private rented sector has increased by 50 per cent between 2007 and 2013 he added, suggesting that rental growth will be noted for the foreseeable future.