Buy to let market swamped by tenantsMake Text Bigger
The buy to let market is saturated with tenants and the small remaining supply of private rented homes will soon dry up, according to a survey of letting agents.
The Association of Residential Letting Agents claims a lack of homes for rent is outstripped by demand.
Around 75% of letting agents report they have more prospective tenants than available properties – and in London that figure rises to 82% of letting agents.
Two years ago, letting agents with more tenants than properties was just 10% across all regions and 8% in London.
Ian Potter, operations manager of ARLA, said: “As many parties are reporting, there is a clear shortage of homes to buy in the UK. Faced with this, many people are turning to rental homes as a more flexible option than buying; yet as our research highlights that the dearth of properties is just as real in the private rented sector and is showing no signs of improvement.
“To work towards a solution, government needs to look seriously at ways of incentivising investment in to the private rented sector to increase the number of properties available for rent.”
The ARLA survey covering the second quarter of this year also revealed a slight increase in landlords buying and selling homes.
With 16% of agents believing landlords are buying properties, up from just 9.3% a year ago, while 14% believe landlords are selling properties, compared with 25% a year ago.
Meanwhile, data from online home sharing portal easyroommate.co.uk shows four tenants are competing for every room advertised across the UK – up 33% in 12 months.
A year ago, three tenants chased each room.
The portal’s statistics reflected those of ARLA with an increase in the year of 58% prospective tenants signing up to share a home while the number of rooms only increased by 17%.
Jonathan Moore, director of easyroommate.co.uk, said: “In rental hotspots like central London, rooms and flats being let within hours of being advertised. As the cost of renting a whole flat soars, a growing number of frustrated buyers are turning to flat shares as a cheaper alternative while they save for a deposit.
“But many homeowners haven’t yet woken up to the possibility of how much they can earn from renting out spare-rooms, and in many places, the supply isn’t rising to meet the demand.”
Brighton has the highest rental demand in the UK, with 13.3 potential tenants per room, followed by Cambridge, Oxford, London and Edinburgh.
Rental costs to share a home are 44% above average in London.
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