The supply of rental properties fell by 8% from December to January while demand from prospective renters rose.
Rent rises also increased in frequency, presenting a bleak outlook for renters in 2018. There were 184 properties per branch compared to 200 in December 2017.
The last time supply reached a level this low was in October 2017, when it stood at 182.
David Cox, ARLA Propertymark chief executive, said: “This month’s results indicate that renters are in for a rough ride in 2018.
“Housing stock is falling as rising taxes continue to force established landlords out of the market and deter entry into the sector – and the volume of renters is increasing as the cost of buying a home is moving further out of reach for many.
“The fact that one in five tenants are experiencing rent increases is just another blow. Ultimately, until the prospect of investing in the buy-to-let market is more attractive for prospective landlords, and stock subsequently increases, tenants will continue to feel the burn.”
On average, letting agents registered 70 prospective tenants per branch in January, compared to just 59 in December.
Landlords kicked off 2018 with contract negotiations, as one in five (19%) tenants experienced rent hikes in January, compared to 16% in December.
While this paints a bleak picture for renters looking into 2018, it’s actually down year-on-year. In January 2017, 23% on tenants had their rents increased, and 30% were subject to rent rises in January 2016.