Rental Market Beginning to Stabilise

Demand in the rental market has beguin to return for the first time since the recession began, according an Association of Residential Letting Agents (ARLA)  report.

Results from the latest ARLA survey of its members shows that the falling numbers of tenants leading to oversaturation of properties available to rent is coming to an end.

A survey suggested 83 per cent of ARLA members signed up 10 or more tenancies during the last quarter, compared to 79 per cent last quarter. Each member signed up an average of 36 new tenancies, compared with 32.6 last quarter.

Almost a third of members (33%) surveyed felt that supply and demand of properties is in balance; this compares with just 19 per cent last quarter. 

Ian Potter, operations manager at ARLA, said: "This shift indicates that confidence is rising among prospective tenants; it seems that people who delayed setting up home 12 months ago, now feel secure enough to proceed. Equally, those who historically have shared a rental property seem happy to set out independently."

The gap between properties available to rent and tenants to fill them also narrowed significantly in the three month period, from 70 per cent to 43 per cent. The number who say that there are more tenants than properties has risen from 10 per cent to 24 per cent.

The situation is particularly significant in the rest of the South East, where three times as many members said that there are more tenants than properties (27 per cent compared with 9 per cent last quarter).

Historically, tenancy rose across all regions of the UK until the recession hit, when properties became harder to let and supply outweighed demand, said ARLA. This trend was felt hardest from late 2008 and into early 2009.

This research also showed the average void period of a rental home has dropped for the first time in more than a year as tenants snapped up properties more quickly.

In the winter of 2008 the average void period was 3.8 weeks across the UK, yet by May 2009 this had risen to 4.3 weeks as homes became harder to rent. Now, the figure has dropped to an average 4 weeks (and 3.8 in the South East), giving further indication that the rental property market is picking up.

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