Tenant demand at highest level for 5 years

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by Kay Murchie

According to the Association of Residential Letting Agents (Arla), tenant demand in the private rented sector has hit a 5-year high.

In prime central London, two-thirds of letting agents have more tenants than properties to rent with increase in demand over supply rising 13-fold in the last 5 years. In addition, the South East has noted a shortage of rental properties and in the remainder of the country, 37% are reporting a lack of properties to rent.

A number of reasons have been attributed to the demand including affordability pressures in purchasing property and an
increase in immigration.

Ian Potter of Arla said the peak demand should come as no surprise. Softening in the sales market is always a driver of further demand in the rental market. Mr Potter added that these latest figures confirm that the private rented sector will once again be the safety valve for a property market concerned by the current financial uncertainties.

The proportion of investment landlords who are selling has dropped from 21% to 16% per cent and buying from 16% to 11%. In addition, tenants are opting to rent for over a 12 month period.