Tenants across the country could face rent rises as the supply of rental homes declines to its lowest level in a year, according to figures published by the Association of Residential Letting Agents (ARLA).
The number of properties registered per letting agent was found to have dropped 5% from the previous month, falling to 172 from 182. The areas with the highest levels of supply are Scotland (280), the North East (243), and Yorkshire and the Humberside (229).
Although London saw a slight increase in the number of properties available in the last month, supply in the capital is 59% below the national average.
Following the seasonal lull in December, tenant demand picked up in January. An average of 31 prospective tenants are now registered per branch – 7 fewer than the same time last year.
As can be expected when demand rises and supply declines, the number of agents reporting an increase in rents went up by 30% in January.
Almost two-thirds of ARLA members believe the upcoming stamp duty reforms for buy-to-let properties will have a negative impact on the market, pushing out landlords and further dropping supply. Most (58%) also think rents will rise as a result.
ARLA managing director David Cox commented: “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.”