New study shows a spike in demand for rental accommodation

New figures indicate that demand for rental properties has increased by 31% between December 2016 and January 2017, while the number of private rented homes available rose by just 3%.

Letting Agents reported that the shortage of rental accommodation was down to a ‘seasonal lull’ during December and January. However, the report also positively demonstrated that both demand and supply had sharply risen over the previous 12 months.

On a yearly basis, the prospective number of Tenants rose by 10% in the month of January, with an average of 34 prospective Tenants registered at each ARLA Letting Agent member. This was an increase from 31 in January of last year which is good news for the industry.

Meanwhile, the volume of houses on the market increased by 12% over the same period, with an average of 193 per branch in January 2017, up from 173 a year earlier.

David Cox, Chief Executive of ARLA Propertymark, commented: “As expected, the New Year brought with it a flurry of activity in the rental market. While supply of rental stock rose slightly, the number of prospective Tenants increased by a much bigger margin. When supply and demand are out of kilter, as they have been for so long now, the market isn’t balanced and fair for Tenants, and rent prices will just continue to rise.”

23% of agents participating in the survey witnessed dramatic rent increases in January, but this was down from 30% in January 2016. On this matter, Cox warned that the government’s plans to implement an out-right ban on Letting Agent fees will make the situation worse for Tenants. He added: “The costs of the vital services Letting Agent fees cover will need to be recouped, and this will get passed on to renters in inflated rental prices. This, combined with new Landlords’ tax, and in particular the upcoming changes to mortgage interest release, means the rental market is far from reaching equilibrium.”

Luke Gidney, Managing Director of Let Leeds commented: “We’ve never experienced such a high demand for professional quality rental accommodation. We create at least 8 applicants for every property that we market each week and this number is set to rise even further. We are short of stock due to the ever-increasing demand so our message to Landlords is: now is the perfect time to purchase a buy-to-let property!”

The demand for rental accommodation in Leeds is set to rise even further. This is due to the thriving business hub which attracts high volumes of working professionals and the 3 prestigious universities which see growing numbers of students relocating to Leeds each year.

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