The supply of rental accommodation is the lowest for at least a year according to the Association of Residential Letting Agents.
After a period of gentle decline, the number of properties registered per letting agent branch fell by five per cent to 172 in January –10 fewer than in December.
In terms of the UK regions, supply in Scotland stands above the national average with 280 properties available per member branch, while the supply of rental properties in London is 59 per cent less, with only 116 properties per branch. However, the capital has seen a slight increase in the number of properties available over the last month, rising from 108 in December 2015.
Demand picked up in January following a seasonal lull in December, with an average of 31 prospective tenants now registered per branch. However, it has not returned to the high levels reported in January and February last year, when there were 38 and 40 tenants registered per branch respectively.
In line with growing demand, the number of agents reporting rent hikes for tenants increased in January, with 30 per cent reporting an increase in rent – the highest since September 2015.
Nearly two-thirds of ARLA members think the Chancellor’s stamp duty reforms for buy to let properties will push landlords out of the market, which will in turn cause supply to drop further. Some 58 per cent believe the reforms will push up rent costs.
“The findings from our members echo our concerns that efforts to penalise buy to let landlords will ultimately impact those entering and currently in the rental market, as by increasing rents landlords will seek to recoup their costs. Rent costs are already rising exponentially, and tenants are feeling the strain of a crowded marketplace. We just need more houses; it’s as simple as that” says ARLA managing director David Cox.