Lack of good quality rental property across the UK, according to letting agents
Letting agents across the UK are reporting that an undersupply of good quality property is threatening the private rental market.
According to latest research from the Association of Residential Lettings the imbalance of supply and demand is continuing. In the second quarter of 2011 three quarters, 74%, of members reported that there were more prospective tenants than properties available.
But this jumps to 82% in central London. And by comparison, just two years ago the number of members reporting an undersupply of rental homes in the UK was 10%, and 8% in central London.
‘As many parties are reporting, there is a clear shortage of homes to buy in the UK. Faced with this, many people are turning to rental homes as a more flexible option than buying. Yet the dearth of properties is just as real in the private rented sector (PRS) and is showing no signs of improvement,’ said Ian Potter, operations manager of ARLA.
‘To work towards a solution, Government needs to look seriously at ways of incentivising investment into the PRS to increase the number of properties available for rent. At the same time, it needs to look at ways of regulating what is becoming an increasingly popular housing option, so that consumers and landlords are protected from issues such as loss of rent monies and deposits as well as defaults on mortgage and rental payments,’ he added.
The ARLA member survey also revealed a slight increase in buying and selling activity among landlords. Some 16% of agents believe landlords are buying properties, up from just 9.3% a year ago. Some 14% believe landlords are selling properties, compared with 25% a year ago.
In some parts of Devon and south Somerset there are hardly any new properties to offer a growing number of tenants, according to Philip Keddie, owner of Sunshine Rentals. ‘It is increasingly noticeable that the market is dividing into three types of tenant category, those on part or full housing benefit, first time buyers renting instead of buying and longer term tenants who are waiting for the sales market to turn,’ he said.
‘Similarly, there are precious few new landlords looking to add or start a portfolio as they also believe house prices have yet to fall. Of concern is a noticeable number of long term landlords who are older, who are preferring to release their equity in the property market and are selling existing rental properties which in turn is putting more people onto an already strained rental market,’ he added.
Adrian Wray, director of Bradgate Property Management in Leicestershire reports a similar trend in the East Midlands. ‘There is a lack of quality properties being made available through licensed agents. The rental properties available are often offered through unlicensed lettings agents, so we would urge prospective tenants or landlords to research their agent carefully, or else risk an unprofessional service,’ he explained.
New stock remains a challenge in the Hampshire area. Rents are at a level which reflects that demand is exceeding supply and family houses in particular are in demand, according to Valerie Bannister, national property director of Your Move Lettings in Southampton.
‘Typically in some areas a three bedroom house will now achieve £1,000 to £1.200 a month.
Those tenants who can find a property are typically remaining in occupancy for longer periods. With comparable rents increasing and the cost to move factored in, tenants prefer to remain in their existing rented accommodation,’ she said.
In Scotland both Glasgow and Edinburgh are displaying high levels of tenant demand and there is a shortage of good new stock coming onto the rental market. ‘Demand is really covering the spectrum from one bed flats up to family homes with gardens. There is no indication of this demand weakening,’ said Fiona Docherty, managing director, Ryden Lettings.
In the Bristol and Bath area one agent, Debbie Vowles of Andrews Letting & Management, said there is on average seven prospective tenants for every rental property available, and even more for three and four bedroom family properties. ‘Those properties are flying off the shelf so we would advise any landlords looking to invest in a rental property in the South West, now may be a good time. But, as ever, it is important to conduct thorough research to ensure you are getting value for money,’ she added.
In West London tenants are staying put rather than move and extending existing tenancies as rents have been increasing by 12% and above in some areas, according to Susan Fitz-Gibbon, director of Fitz-Gibbon Limited.
