It predicts that further imbalance in supply and demand are likely as is a rise in arrears and repossessions as things are set to get worse before they improve.
‘The package of measures unveiled in the government's Housing Strategy could go some way to helping get the wider housing market moving. However it will take time for the measures to have an impact, and in the meantime the issue of a severe lack of stock will continue to affect the PRS well into 2012, particularly in London and the South East,’ said Ian Potter, operations manager at ARLA.
‘Almost three quarters of ARLA members, 74%, already report that there are more tenants than available properties, and this is a story we're likely to see worsen. However, there is some anecdotal evidence in parts of the country that stock levels of rental property could be increasing,’ he added.
ARLA also predicts a rise in arrears and repossessions within the PRS, as latest government figures show that unemployment is at its highest for more than 15 years, especially in the public sector.
‘Creeping unemployment may have an impact on the financial stability of both tenants and landlords, which in turn may spark a rise in rental and mortgage arrears, and even repossessions,’ said Potter.
‘While it is impossible to know whether someone will be solvent in the future, it is important to carry out relevant checks on a potential landlord or tenant, to look for signs of financial instability. We would always recommend that consumers rent or let a property via a licensed lettings agent, who will be able to carry out checks on their behalf,’ he explained.
However, ARLA predicts that one positive outcome of a challenging 2012 could be increased scrutiny of the PRS, both as part of the PRS Review proposed in the Housing Strategy, and as a result of increased attention from consumer rights bodies.
‘An improvement in the standards of consumer care in the PRS could be the silver lining of the post-recession cloud currently covering the housing market. Lettings is an unregulated industry which means unethical letting agents, and landlords, are able to exist unchallenged,’ said ARLA president Tim Hyatt.
‘In London, the Mayor has pledged to set common standards across London for landlords and agents but we would like to see this on a nationwide scale. In absence of this to date, we have developed our own licensing scheme to help protect consumers if something goes wrong. We would therefore urge that consumers use an ARLA licensed lettings agent,’ he added.
All ARLA licensed member letting agents must be covered by a client money protection scheme and hold professional indemnity insurance which means consumers are protected against negligence. They must follow the organisation’s strict codes of conduct and have a certain level of training.
‘Ultimately this means that, should something go wrong, there are protection mechanisms in place. We would therefore always advise that consumers use an ARLA licensed lettings agent,’ Hyatt concluded.
