This is according to the Association of Residential Letting Agents (ARLA), which has released its predictions for 2011.
“The lack of new rental stock for the private rented sector (PRS) has been the dominant factor in the market for 2010, and this will likely to continue well into the new year because of the broader issues of diminishing housing supply,” said Ian Potter, operations director of ARLA.
“Our research has shown an increase in reluctant landlords – homeowners who have to let homes they cannot sell – meaning new rentals have become available but nowhere near enough to cater for the demand out there.”
During Q4 2010, almost three quarters of ARLA member offices reported that there were more tenants than available properties.
Potter added: “This issue is being compounded by landlord uncertainty about the impact of cuts to housing allowance and the longer term implications of this in regard to rent guaranteed.”
ARLA’s also predicts the following for 2011:
• No respite from unethical landlords – 2011 will likely see more local authorities introduce selective licensing – which enables them to monitor and regulate local landlords. Yet this is an ineffective and inconsistent method of regulation, which doesn’t deter rogue activity.
• Financial worries – some agents are struggling financially post-recession, meaning there may be an increase in agents folding and losing client monies in the process. Ian Potter said: “To mitigate this, we would urge landlords and tenants alike to only use an ARLA agent – our members are licensed, meaning client money is protected, and giving access to a redress scheme if things go wrong.”
• Discrepancy in housing type – next year it is likely that tenants will have to make bigger compromises over the kind of houses they rent. ARLA research shows that in many parts of the country, there is an increase in family homes coming onto the market because they can’t be sold. At the same time, industry is reporting a lack of family homes being built or sold, in the South East especially, meaning the ‘best fit’ home may not always be available.