16:04 PM, 31st August 2011, About 11 years ago
The availability of homes to rent is drying up as tenant demand continues to outstrip supply, according to letting agents.
Strong demand from frustrated would-be buyers is the key driver behind the rush for lettings, said the Royal Institution of Chartered Surveyors (RICS), as many prospective tenants are struggling to find a mortgage or raise a deposit.
One in four letting agents confirmed they are dealing with more new tenants rather than a fall in inquiries.
While just five per cent more letting agents reported an increase in new instructions to rent homes than those indicating a fall in the three months ending July 31, said RICS.
The report also disclosed some buy to let landlords, especially in London and South East, are selling homes when tenancies come up for renewal, which is reducing the supply of letting properties.
The RICS residential lettings survey also confirmed rents are continuing to rise, with 34 per cent more letting agents reporting an increase rather than a fall. This figure was down on the previous quarter; when 42 per cent of letting agents reckoned rents were rising.
Overall, most letting agents believe rents will keep increasing over the coming months.
“The combination of strong tenant demand and a limited stock of good quality properties on offer is pushing rents even higher across much of the country,” said RICS spokesman James Scott-Lee.
“The imbalance is set to persist as mortgages for first time buyers are likely to remain in short supply for some time. The inevitable outcome is that rents will continue to increase.”
Letting agents also remarked more tenants are looking for state assistance with finding a home.
Social housing lets account for 13 per cent of all new contracts – up more than 50 per cent from eight per cent in the previous quarter – which is the highest level reported since records began in 1999.