Tenants are facing a battle for property as the supply of houses and flats falls while demand rises.
This is according to new findings from the Association of Residential Letting Agents (ARLA), which indicate that rents could be set to rise.
The organisation said more than two-thirds of its members reported that would-be tenants outnumbered available properties, while the average number of homes available through each ARLA member was down 6% over the past three months from 143 to 135 per branch.
David Cox, managing director at ARLA, said: "This quarter, we have seen demand for properties in the rental sector significantly rise, while the supply of residential rental properties has dropped.
"This activity has bucked the seasonal trend recorded over the past 11 years for this quarter, in which we normally see an increase in the number of new tenancies signed up. However, with landlords not investing in new buy-to-let property, tenants are finding it increasingly difficult to secure contracts."
ARLA also found that tenants were more and more likely to ask letting agents for references from landlords before signing tenancy agreements.
Just under one in 10 renters now asks for this kind of guarantee.
Cox added: "It's great to see an increase in consumers making an active play to check that their landlords are financially viable. Renting a property and laying out considerable finances is a big commitment, and it is important that consumers ensure they are protected.
"By choosing to rent through an ARLA-licensed agent or landlord, tenants' money is not only guaranteed by a client money protection scheme, but tenants are also given peace of mind that any issues can be dealt with in a professional and safe manner by a qualified agent."
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