The Association of Residential Letting Agents (ARLA) has announced a record high in demand for rental accommodation, at the same time housing stock has decreased.
The January 2020 Private Rented Sector Report (published by ARLA and available to read here) shows that the demand for private rental property has reached a record high, and the region with the highest levels of demand is the North West.
This record demand has been exacerbated by a fall in the actual number of properties available. Letting agents have reported a fall in the total number of properties managed per branch from 206 in December 2019 down to 191 this January. That’s the lowest it’s been since last July when the figure fell to 184 properties per branch.
The low level of housing stock is bad news for tenants because it means they have to deal with increased competition for the few properties available, but it also puts them at a disadvantage when negotiating rental fees. The report by ARLA highlights that an astonishing 42% of tenants experienced a rent increase in January, up from 32% in the previous year. It’s hardly surprising that landlords can command a higher price in the face of strong demand and reduced availability.
More and more landlords are finding the private rental sector unattractive because the increased regulations and confusing government policies have reduced the profitability of the sector. The biggest hope for a positive change for landlords will come on March 11th when Rishi Sunak, the Chancellor of the Exchequer, will announce a new budget.
Ian Bythell, Petty Real company director, commented:
“The rental market has often seen peaks and troughs and I would encourage landlords, or anyone thinking about becoming a landlord to take a step back and consider the long-term situation. Yes, we are seeing an imbalance between demand and supply at the moment, but unstable markets tend to find an equilibrium. It’ll be very interesting to see where the endpoint will be.”