The number of rental properties available for tenants decreased seven per cent between the end of April and end of May according to data from the Association of Residential Letting Agents.
ARLA says its member agents are now managing just 179 properties per branch on average - the smallest number recorded so far this year.
The report found that in London – known for its booming rental culture – the situation is significantly worse, with only 134 managed properties per branch in May.
Demand, meanwhile, remains the same: ARLA members reported 36 potential tenants registered per branch in May, remaining the same as the previous two months.
In terms of rents, some 34 per cent of ARLA agents reported increases for tenants. This figure has been slowly creeping up from the start of the year, when just 27 per cent of agents reported hikes.
Those living in the south west were the most affected by monthly rent increases – with just under half of agents reporting an increase.
“It’s worrying to see that there such a sharp decrease in supply, when we know there is already a struggle to meet housing needs. Dwindling supply and already-high demand is an issue that’s going to continue to plague the property market” says ARLA managing director David Cox.
ARLA’s research was based on a relatively small sample - 416 member branches.