The demand for rental properties will significantly outstrip supply next year, according to the Association of Residential Letting Agents (ARLA).
In its latest report, ARLA is predicting that the strong demand for rental properties will continue in 2011 with the number of prospective tenants far exceeding the number of available rental properties.
This is a continuation of the situation seen this year when during Q4 almost three quarters of ARLA member offices reported that there were more tenants than available properties.
The increased demand for rental properties comes at a time when house prices continue to fall. Despite a modest improvement in mortgage lending, many potential buyers are prevented from buying a home because of tight lending criteria.
The unavailability of borrowing is set to continue throughout 2011 which will force many potential home buyers to rent instead.
The strong demand from tenants is likely to exert an upwards pressure on rents which may mean that they have to make compromises on they hind of houses they rent, however ARLA is reporting an increase in reluctant landlords who have homes that they cannot sell and rent out instead.
However in general, “the lack of new rental stock for the private rented sector has been the dominant factor in the market for 2010, and this will likely to continue well into the new year because of the broader issues of diminishing housing supply,” Ian Potter, operations director of ARLA, points out.