Demand from prospective tenants for rented homes in the UK increased in August at the same time as supply dipped slightly, according to the latest research.
Overall lettings agents say that the outlook for the rental market is positive despite the decision to leave the European Union, the monthly private rental sector report from the Association of Residential Lettings Agents (ARLA) also shows.
The data from the monthly report reveals that letting agents had 37 prospective tenants registered on average per branch, the highest number since June 2016, when there were also an average 37 tenants per branch.
It shows that during the first half of this year, there were signs that demand was cooling off, as each month figures were down year on year from 2015, however over the last three months, demand has been up year on year.
In January there were 31 tenants per branch compared to 38 in the same month in 2015, 37 in February, down from 40 in 2015, 33 in March, 34 in April, 33 in May, 37 in June and 36 in July, indicating that the market is steady.
Meanwhile, the number of rental properties on letting agents’ books stood at 183 in August, down marginally from July when there were an average of 184 properties managed per branch.
But year on year supply was up by 3%. In August 2015 agents managed 178 properties on average.
The data also shows that tenants are not prepared to pay over the top for a rented home. Indeed, the number of tenants negotiating rent reductions rose in August to the highest levels seen since records began at the start of last year.
ARLA members reported that 3% of tenants secured a rent reduction last month, compared to 2.1% in July.
In August some 51% of ARLA members reported some signs of uncertainty from either those looking to rent or those looking to let a property following Brexit. However, this has had very little real impact on the rental market as the majority of members reported no change in rent prices, supply of available properties, or demand from prospective tenants following the referendum result.
A breakdown of the figures shows that 12% said rent prices increased, 11% that they decreased and 72% reported no change. When it comes to supply 16% said it had increased, 17% decreased and 63% no change. Some 17% reported demand increased, 12% that it has decreased and 67% no change.
‘Although Brexit painted a temporary picture of uncertainty for tenants and landlords, our findings show that the market remains in good shape,’ said David Cox, ARLA managing director.
‘We’re not seeing anything across supply or demand that is out of the ordinary and while demand is at high levels, this is being matched with a decent volume of properties on the rental market,’ he pointed out.
‘What’s good is that more tenants are managing to successfully negotiate rent reductions, and that agents and landlords seem to be responding well to this. The rising cost of renting, especially in major cities such as London, is an ongoing issue in both the buying and lettings market so it’s promising to see small steps towards better affordability for renters,’ he added.
