The latest report from the Association of Residential Letting Agents Propertymark suggests that rents look set to increase in the coming months, as the supply-demand imbalance grows.
Data indicates that demand for rental accommodation increased by 31% between December and January 2017, while the number of available homes rose by just 3%.
Agents report that a seasonal lull was to blame for the shortage in rental accommodation available between December and January. However, the report indicates that demand and supply rose markedly in the last year.
Annually, the number of prospective tenants rose by 10%, with an average of 34 would-be renters registered per ARLA branch.
The number of homes available on the market increased by 12% in the same period, with an average of 193 per branch in January, up from 173 one year earlier.
David Cox, chief executive at ARLA Propertymark, noted: ‘As expected, the New Year brought with it a flurry of activity in the rental market. While supply of rental stock rose slightly, the number of prospective tenants increased by a much bigger margin.’
‘When supply and demand are out of kilter, as they have been for so long now, the market isn’t balanced and fair for tenants and rent prices will just continue to rise,’ he added.
23% of ARLA agents surveyed saw rental hikes during January, down from the 30% seen in January 2016.
Mr Cox went on to warn that the Government’s plans to implement an out-right ban on fees will make the situation worse for tenants.
‘The costs of the vital services letting agent fees cover will need to be recouped and this will get passed on to renters in inflated rental prices. This, combined with new landlords’ tax, particularly the upcoming changes to mortgage interest release, means the rental market is far from reaching equilibrium,’ Cox concluded.