Tenant demand increases in the UK as number of properties for rent falls
Demand from new tenants in the UK’s private rented sector is rising at a time when the number of homes available to rent is falling, the latest figures show.
The monthly data from the Association of Residential Lettings Agents (ARLA) shows that the number of new prospective tenants registered per letting agent branch increased from 71 in June to 79 in July, the highest level seen in 2018 so far.
It hasn’t been this high since September 2017, when there were also 79 per branch and year on year, demand is up 13% as there were just 70 prospective tenants registered per letting agent in July 2017.
The supply of available properties moved in the opposite direction to demand, falling from 191 in June, to 184 last month and on an annual basis this figure is down 4% from 192 in July 2017.
The data also shows that the number of tenants experiencing rent hikes in July was 31%, down from 35% in the previous month and year on year this figure hasn’t changed.
According to David Cox, ARLA chief executive, buy to le investors are being pushed out of the market by increasing costs and continued regulatory change, and new landlords are being deterred from entering.
Last month, an average of four landlords took their properties off the market per branch, up from three this time last year and as supply falls, competition among tenants increases, which pushes up rent costs. Almost a third saw their rents rise last month, and although this figure was down from June, it’s still far too high,’ he said.
‘To put tenants back in the driving seat, we need more homes available to rent, and the only way this will be achieved is if the Government makes the market more attractive for buy to let investors,’ he added.
The figures indicate that the ‘war being waged on UK landlords by the Government’ is doing little to address the issues facing the private rental sector, according to Adam Male, director of lettings at Urban.
‘While numerous legislation amendments and implementations have looked to reduce the cost that the nation’s tenants are facing, penalising landlords in the buy to let sector has barely made a dent in the number of people facing a rent increase,’ he said.
‘What’s more, the continued decline of properties available in the sector due to an exodus of landlords, and the highest level of demand seen this year will further tilt the supply demand imbalance and inevitably see rents grow ever higher,’ he added.