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Demand for rental property will continue to outstrip supply for
much of 2011 and into next year, according to the Association of Residential
Letting Agents (ARLA).
“The lack of new rental stock for the private rented sector (PRS) was the
dominant factor in the market last year, and will continue well into 2012
because of the broader issues of diminishing housing supply and lending drying
up,” said Ian Potter, operations director of ARLA.
“The Leader of the Labour Party, Ed Miliband, recently flagged research that
shows 41 per cent young low-to-middle earners live in privately rented
accommodation compared with 14% in 1988. This trend looks set to continue while
mortgages are so hard to come by and the capital barriers to home ownership
appear so entrenched.”
The majority of ARLA member offices (59 per cent) believe that demand for
rental property will continue to outstrip supply in 2011. Almost four in ten
ARLA offices believe that more private landlords will enter the market over the
next 12 months.
Ian Potter continued: “The PRS is taking on the burden created by diminishing
housing supply – a trend that will continue for the short to medium term.
According to our research, this issue has been identified as UK-wide by our
members but particularly pronounced in the south east and London.
“Therefore with more consumers depending on rental properties and new
landlords coming to market, the Government must act now to address the quality
of the PRS housing stock. This means incentivising renovation, improving options
for sustainable refurbishment, and introducing regulation to stamp out bad
practice. The Budget would be a perfect place to start!”
ARLA members are cautiously hopeful that government intervention may lead to
an improvement of the PRS – more than six out of ten ARLA member offices (61 per
cent) think that the quality of rental property will remain the same in 2011 but
a minority of slightly more than a quarter (26 per cent) think quality will
improve.
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