Almost three quarters (70 per cent) of ARLA member offices say that there are more tenants than available properties.  This is an increase from 59 per cent last quarter and 24 per cent in September 2009.

The situation is particularly pertinent in the South East, where 76 per cent of member offices report more tenants than properties.

Ian Potter, operations manager of ARLA, said: “The spring period would usually see a rise in rental properties coming onto the market, and although there is some evidence of landlords considering selling up, it is not enough to counteract the change in supply.

“This situation has been deteriorating rapidly in recent months, as the supply and demand of homes to buy is also swinging out of kilter – making the prospect of a severe rental housing shortage ever more likely.

“In his Budget, the Chancellor did little to incentivise investment in the Private Rented Sector – in fact, the rise in Capital Gains Tax may actually discourage potential landlords from investing.  This, combined with low construction levels and the cap on housing benefits, means that instead of the housing market getting back on its feet, what we may soon see is people going without homes they can afford – something that simply should not be allowed to happen.”