The Association of Residential Letting Agents latest research has revealed that the supply of rental accommodation is at its lowest levels since records began a year ago. ARLA’s January Private Rental Sector report also showed a slight increase in demand for rental accommodation in the first month of this year.
Following a period of gentle decline, the amount of properties registered per letting agent branch fell by 5% to 172 in January. This was 10 fewer than in December.
From a regional perspective, supply in Scotland stands above the national average, with 280 properties available per member branch. By contrast, rental accommodation stock in London is 59% less, with just 116 properties per branch. This is despite demand in London being higher than anywhere else in the country. Nonetheless, London has seen a slight rise in the supply of rental properties, rising from 108 in December 2015 to 116 in January 2016.
“Supply of housing continues to be a problem and tenants bear the brunt of this with more people competing for properties at higher prices,” David Cox, Managing Director of ARLA, said.
“The majority of tenants find that it is impossible to save very much at the end of the month to put towards buying their own home. Our recent Cost of Renting report found that a fifth of those renting in the UK do not expect to ever be able to afford to buy a home, and unless we act soon to build more properties, this number will only get higher.”
The report also found that nearly two-thirds (63%) of ARLA members believe that George Osborne’s stamp duty changes for buy-to-let investors will push landlords out of the market. This, in turn, will further reduce supply. Furthermore, 58% of members think rents will rise as a result of Osborne’s reforms.
“A few weeks into the new-year and the April deadline for the stamp duty surcharge is looming and interest from buyers looking to invest in buy-to-let properties and beat the deadline is ramping up,” Cox added.
“The findings from our members echo our concerns that efforts to penalise buy-to-let landlords will ultimately impact those entering and currently in the rental market, as by increasing rents landlords will seek to recoup their costs. Rent costs are already rising exponentially, and tenants are feeling the strain of a crowded marketplace. We just need more houses; it’s as simple as that.”
