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Agents warn that supply in rental properties is set to contract
Tenants will face fierce competition for privately rented stock as demand increases and supply contracts, according to ARLA.
The association third quarterly report for 2014 shows 68 per cent of agents reporting more would-be tenants than properties available. This figure represents the third successive and biggest increase – it’s up 46 per cent from Q3 2013, up 54 per cent from Q1 this year, and up a whopping 59 per cent from Q2 2014 this year.
This trend is reinforced by the fact that supply decreased in the last quarter, with ARLA licensed members recording a six per cent drop in the average number of managed BTL investment properties on their books, from 143 to 135 per agency.
ARLA warns that stock levels are likely to continue to decrease in volume – members report that the number of landlords investing in additional BTL units has dropped eight per cent in the last quarter.
As a result, landlords selling property now exceed landlords buying property for the first time in four years.
“This has bucked the seasonal trend recorded over the past 11 years for this quarter, in which we normally see an increase in the number of new tenancies signed up. However, with landlords not investing in new BTL property, tenants are finding it increasingly difficult to secure contracts” says ARLA managing director David Cox.
However, there may be some good news for supply – some agents have told the association that a large proportion of BTL properties recently put up for sale have come back to the rental market after failing to find buyers.
