The Association of Residential Letting Agents (ARLA) reported back in January that 41% of letting agents said there were more potential tenants than properties in the final quarter of 2009. This was up from 24% in the 3 months to the end of September.
ARLA concluded that there had been a turnaround from early last year when the market was flooded with properties from people unable to sell their homes and were forced to rent them out instead.
As the property market has picked up these homes have been selling which has reduced the properties on the market. This is at the same time that many people who would like to buy a property are struggling to find somewhere suitable, due to the shortage of homes on the market.
In addition, others are unable to raise deposits or to obtain mortgages because of the strict lending criteria adopted by banks and building societies and adding to the number seeking rented property.
In the first quarter of 2010 ARLA reported that 59% of their agents have seen demand outstrip supply and that there simply isn’t enough housing stock coming onto the rental market.
In central London the lack of stock is almost at crisis point, which is driving up rents dramatically and, in some cases, these are back to pre-credit crunch levels.