ARLA: Demand is still outweighing supply significantly
ARLA, the Association of Residential Letting Agents has reported that demand for quality properties to rent is still firmly outstripping supply – which is good news for landlords and buy-to-let investors.
The bi-annual survey of ARLA members shows that more than 58 per cent are still reporting a significant gap between supply and demand – an increase of three per cent from the previous survey of December 2011.
Compared to three months ago, the national average void period, when properties are vacant between tenants, is down from 3.1 weeks to 2.9 weeks, suggesting an increasing backlog of prospective tenants.
While the survey also reports that the average number of new tenancies signed has only risen slightly, this is probably because suitable properties are in short supply.
Meanwhile, the number of properties available for sale in the UK housing market has decreased by 38 per cent since the start of the recession, according to the September report from the National Association of Estate Agents (NAEA).
It recorded an average of 62 properties available for sale per branch during September; this is an increase from 60 in August 2012, but much lower than the average 100 per branch in December 2008.
President of ARLA, Jane Ingram, said that the demand for rental property was partly fuelled by would-be first-time buyers, who simply can't afford to get on to the housing ladder.
She said: "Urgent action needs to be taken to ensure everyone who needs a home can find one, and at an affordable price."
Stephen Davies, of lettings agents Connells in Emersons Green, agrees. He said: "Usually we see a fall off in people looking for homes to rent in the run up to Christmas, but this year that just isn't happening.
"Supply is still failing to keep pace with high demand and the situation is currently exacerbated by landlords deciding to wait until the New Year before making arrangements to rent out their property.
"However, astute landlords recognise that there are still many people out there looking for a home to rent immediately and, with fewer rental properties available, they are likely to be able to cherry pick the best tenants.
"Current high demand from tenants, rising average rents and very competitive property prices mean there has never been a better time to be a landlord," says Stephen.
Paul Jarman at Assured Property Rentals in Keynsham says things are busy in his office too.
"New landlords and properties are always required to satisfy the ever-increasing demand we receive from our growing tenant database," he said.
"The demand for good rental property is extremely high at the moment because house buyers are facing very tough lending criteria, forcing mortgages out of reach for many.
"Now is a good time for the landlord/investor to get involved in the buy-to-let market. Prices can be negotiated and there is a ready supply of tenants, so buying a property is an opportunity to invest in an appreciating asset with the benefit of an income."
Kevin Seager, from Martin & Co in Kingswood, agrees there is a stock shortage, but he has not noticed this leading to an increase in rents so far this year. He believes that tenants are demanding more for their money.
He said: "There been a increase in accidental landlords, who failed to sell their homes and decided to rent them instead.
"When the sales market picks up, we could see these properties go back on the market very quickly, leaving tenants struggling to find somewhere new to live.
"There is a particular shortfall of good quality two- and three bedroom homes and a need to help families on housing benefit. Perhaps the landlords need to be a little more sympathetic and work with letting agents to ensure the quality of these tenants. I would say that, with good supervision, they make great tenants and are usually looking for somewhere long term.
"Tenants are expecting better quality homes and want more for their rent now than they did two years ago. They want homes in top 'for sale' condition and are tending to staying longer in one property.
"If a landlord wants a good return on their investment they need to ensure the property is in good order."