Due to rising house prices renting instead of owning continues to become more of the norm, especially for upcoming generations.
It is not a surprise that demand for rental properties has grown, but what is surprising is that the number of properties up for rent has taken a fall.
The Association of Residential Lettings Agents (ARLA) has released its latest report on the Private Rented Sector and it has been revealed that year on year comparisons show a 13% increase in the demand for rental properties.
Across the same period of time, the number of properties up for rent has dropped by 4%, creating an opportunity for current and prospective property investors.
This report collected data on both demand, supply and average prices from the ARLA’s 191 members, to gain insight into changes within the market.
It was found that during the month of July 2018 there were 79 new prospective tenants registered per letting agent branch. Not only was this figure up from June (71), but it's also the highest level of demand seen since September 2017.
In terms of properties available for rent, this figure stood at 191 per letting branch in June, but fell to 184 in July as four landlords per branch took their buy-to-let properties off the market. At the same time, almost 1 in 5 stated that they intend to remain active in the sector indefinitely.
Increased demand creates competition and the market responds as expected with prices seeing a rise. According to the report, during months of the June and July 2018, 31% and 35% of tenants saw an increase in rent, respectively.
There have been many property experts claiming that this trend will continue for the foreseeable future, with recent reports forecasting a 15% rise in rental rates over the next 5 years.