Soaring demand for rental accommodation has led to calls for more incentives to encourage buy to let landlords to invest in the market.
According to Countrywide, tenant demand is at a record high with up to nine tenants competing for each property.
Countrywide’s 211 branches had 50,480 new tenants register in the second quarter of this year, a 16 percent rise on the first quarter.
The sharpest increase was in June, with over 18,000 new tenants registering, the highest number in a single month since records began in 2003, and 22 percent more the previous month.
However, the rise in tenant demand is in sharp contrast to the fall in the number of new properties being offered to rent. They have fallen six percent in the last three months.
John Hards, Countrywide Residential Lettings co-managing director, said: “The number of tenants entering the market is at unprecedented levels and we have yet to enter the peak season.
“Student demand for private rental accommodation will increase further, with university applications at record levels.
“The buy to let sector remains a good source of investment. However, the government needs to do more to incentivise new landlords in order to ease the current shortage of properties. If tenant levels continue to rise at the same rate, this will be further exacerbated.”
A new report from specialist lender Paragon also confirmed a growth in tenant demand.
Nigel Terrington, Paragon Group chief executive, said: “Strong tenant demand is great news for landlords, but will lead to rental inflation for tenants unless the private rented sector is able to expand to meet this demand.
“Pressure is building on the finite number of properties in the sector, because the lack of buy to let mortgage availability has prevented landlords from growing their property portfolios.
“It is clear that confidence is high amongst the landlord community, which is reflected in the greater appetite for investment.
“There is obviously a dislocation between landlords’ intention to purchase and their actual ability to do so, given the continued scarcity of buy to let mortgage finance. “Landlords still value residential property as an investment vehicle.”
In the second quarter of this year, 70 percent of ARLA agents reported more tenants than properties available.
Last September, only 24 percent said this was the case. The latest LSL buy to let index also shows tight supply, which it says is bolstering rents.
The company, which includes national lettings chains Your Move and Reeds Rains, says rents are now at their highest level since the peak in November 2008.
• Research by the Deposit Protection Agency (DPS) suggests renting properties through a letting agent could considerably shorten void periods.
The statistics reveal letting agents find tenants for 63 percent of properties within two weeks compared to 38 percent of properties rented directly by the landlords.
The exact cost to landlords is not recorded however online letting agent Upad.co.uk estimated the cost of void periods could be up to £3 billion a year.
Two of the 10 worst areas for empty properties were in Lancashire and areas in Surrey, Essex and Hampshire were also badly affected.
In some areas 50 percent of rental properties have been empty for more than three months.
There are 762,000 vacant homes in England with many of them in a poor state of repair and the owners unable or unwilling to sell them.
Kevin Firth, Director at DPS, said, “Many landlords market their properties very effectively but the evidence we have compiled in the past two years demonstrates clearly that there is more they can learn to try to decrease void periods.
“In the current market- where demand for rental property far exceeds supply- there is no excuse for allowing properties to remain dormant and not earning income.”
