The rental market is being threatened by a lack of good quality property according to ARLA, as its research reveals that demand from tenants is still outstripping supply.
ARLA research out today reveals that 74% of members reported there were more prospective tenants than properties available during Q2 2011 - a figure which jumps to 82% in the middle of London.
In contrast, two years ago the number of members reporting an undersupply of rental homes was just 10%, and 8% in central 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 (PRS), and is showing no signs of improvement.
"To work towards a solution, Government needs to look seriously at ways of incentivising investment into the PRS to increase the number of properties available for rent. At the same time, it needs to look at ways of regulating what is becoming an increasingly popular housing option, so that consumers and landlords are protected from issues such as loss of rent monies and deposits as well as defaults on mortgage and rental payments."
The ARLA survey covering Q2 2011 also showed an increase in landlords' buying activity - 16% of agents say landlords are buying properties, compared with just 9.3 per cent 12 months ago. And some 14% of agents say landlords are selling their properties, down from 25% a year ago.
Read the ARLA Q2 2011 review here.