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People in the UK looking to rent a home face fierce competition for privately rented residential property as demand increases and supply contracts, according the Association of Residential Letting Agents (ARLA). ARLA’s third quarterly report shows that 68% of respondents reported more would be tenants than properties available. It also shows that supply is down 6% from 143 to 135 per branch. The number looking to rent represents the third and biggest successive increase, from 46% in the third quarter of 2013, to 54% in the first quarter of 2014, to 59% in the second quarter of 2014. This represents an increase of nine percentage points between the second and third quarters, the largest increase since numbers were on the up. This is reinforced by the fact that supply of residential property on the private rental market decreased in the last quarter, with ARLA Licensed members recording a 6% drop in the average number of managed buy to let investment properties on their books. Stock levels are only going to continue decreasing, as members reported that the number of landlords investing in buy to let property shrunk by 8% in the last quarter, from 35% to 27%. At the same time, the number of landlords selling their buy to let property increased by 5% from 27% to 32%. As a result, the relationship between buying and selling buy to let investments has reversed, with landlords selling property now exceeding landlords buying property for the first time in four years. ‘This quarter, we have seen demand for properties in the rental sector significantly rise, while the supply of residential rental properties has dropped,’ said David Cox, ARLA managing director. ‘This activity 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 buy to let property tenants are finding it increasingly difficult to secure contracts,’ he explained. The report also shows that whilst the overall property stock is down, some ARLA Licensed members reported that a large proportion of buy to let properties that were put up for sale have since come back onto the rental market, after landlords’ bids to sell had been unsuccessful. The number of these properties coming back onto the lettings market rose from 9% to 16% in the last quarter. There is some good news when it comes to tenants in the private rented sector; tenants have been wising up and taking responsibility as members saw an increase in tenants requesting references on potential landlords from lenders, with the figure from 7% to 9%. ‘It’s great to see an increase in consumers making an active play to check that their landlords are financially viable. Renting a property and laying out considerable finances is a big commitment, and it is important that consumers ensure they are protected,’ said Cox. ‘By choosing to rent through an ARLA licensed agent or landlord, tenants’ money is not… Continue reading →
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