The number of available private rented properties increased in July, according to the Association of Residential Letting Agents monthly Private Rental Sector Report.
ARLA said agents managed an average of 189 properties per branch in July, compared to 178 in June.
Demand across the UK has decreased slightly this month, with an average 35 prospective tenants registered per ARLA branch in July, compared to 36 in June.
Whilst this may be a result of the quieter summer months it is a step in the right direction for balancing supply and demand in the sector. However, demand in London has continued to rise, with 40 prospective tenants registered per branch in July, compared to 36 per branch last month.
The good news is that a third of ARLA agents (35%) expect the supply of rental properties to continue increasing over the next five years. The East of England is most optimistic, with over half of agents in the region (53%) predicting supply will continue to rise. However, only 15% in the south West and 16% in Yorkshire and Humberside predict continuing growth of housing stock for tenants.
Rise in rent costs
Letting agents are continuing to see increases in the cost of renting for tenants, with two in five agents (37%) reporting rents had increased between June and July; the highest number since tracking began in January, when levels were at 27%.
The report also found tenants in the West Midlands have been affected by rent increases the most, with over three fifths (64%) of agents reporting rents had increased in July shortly followed by the East of England where 53% of agents witnessed rent increases. In comparison, only 21% of tenants in the North West experienced a rise.
David Cox, managing director, Association of Residential Letting Agents, said: “To finally see a rise in available rental properties is definitely a step in the right direction; although with demand remaining the same, we still have a long way to go in achieving a balanced and stable private rented sector.
“Following the changes to pensions made in April, the fact that a third of agents are predicting supply will continue to increase over the next five years could be a result of people releasing equity from their pensions to invest in the buy-to-let market.
“It’s clear from this month’s findings that the growing gap between supply and demand is an issue still rife in the capital; which doesn’t look to be improving any time soon. With the cost of renting continuing to rise month by month, it’s a worrying state of affairs for those hoping to save for their first house and just pushing the aspiration of owning a home further out of reach.”