The number of available properties to rent is falling at an alarming rate, particularly in Greater London, according to property platform Home.
It says this is bad news for tenants, who are facing higher rents and stiff competition to secure the best homes. Rents have already risen by 4.0 per cent in the Greater London area over the last 12 months.
The number of available homes to rent in Greater London that have been on the market for 20 weeks or less plummeted by 24 per cent over the last year, from 52,388 in August 2017 to 39,746 in August this year.
The current number of properties available to let is at its lowest level since March 2015, Home says.
An average yield of just 3.7 per cent in August in the capital, compared to 4.7 per cent across Britain, looks to be a key factor in landlords leaving the rental market in London.
Across mainland UK, the supply of all available homes to rent, including hard to rent properties that have been on the market for more than 20 weeks, has fallen by more than 10,000 since July 2017, from 233,453 to 223,115.
Aside from London, another particularly badly hit area is the South East, where supply of all available rental properties fell from 30,066 in August 2017 to 27,728 in the same month this year.
The dearth of rental property in the capital is likely a direct result of a raft of fiscal and regulation restrictions for buy to let investors.
“The main driver for rent hikes going forward is an alarming lack of homes to rent, especially in Greater London” says Home director Doug Shephard - “24 per cent is a huge drop and much of it can be ascribed to the BTL exodus. Basic economics tells us that when supply falls prices must rise. In the case of London, it looks like rents will increase quickly – and they need to.”