Shortage of rental property undermining market, says ARLA
ARLA has warned that an undersupply of good quality property is straining the UK rental market to the limit, with supply failing to match demand.
One agent, Philip Keddie, of Sunshine Rentals in Devon, said: “In certain parts of our area, we have hardly any new properties to offer to a growing number of tenants.“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.“At the same time, there are precious few new landlords looking to add to 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 on to an already strained rental market.
”According to ARLA, during the second quarter of this year 74% of members reported that there were more prospective tenants than properties available – a figure that jumps to 82% in central London.
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.Ian Potter, operations manager of ARLA, said: “The Government needs to look seriously at ways of incentivising investment into the private rented sector 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.”The ARLA member survey, covering the second quarter of this year, also revealed a slight increase in buying and selling activity among landlords: 16% of agents believe landlords are buying properties, up from just 9.3% a year ago. Some 14% of agents believe landlords are selling properties, compared with 25% a year ago. The research was conducted among 479 member offices, whilst an ARLA survey of landlords was conducted among 1,519 landlords.