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Buy-to-let rents rise as supply falls

Landlord income from buy-to-let income is rising again as demand from tenants outstrips the plunging supply of rental property.

The number of rental properties available per estate agency branch fell 7% in May, while a third of agents reported rent increases.

Three in four letting agents now predict demand increasing over the next five years, according to the Association of Residential Letting Agents (ARLA) monthly private rental sector report.


Yet each ARLA branch reported just 179 managed properties per branch in May, the lowest level this year.

Worryingly, London – known for its booming rental culture – has the least amount of rental properties per branch, with only 134 managed in May, compared to 273 properties per branch in Scotland.

Whilst overall available rental properties decreased, demand remained the same. ARLA members reported 36 potential tenants registered per branch in May, remaining the same as the previous two months. 

During May, 34% of ARLA agents reported rent increases for tenants. This figure has been slowly creeping up from the start of the year, when just 27% of agents reported hikes for tenants.

ARLA managing director David Cox said: “It is worrying to see such a sharp decrease in supply, when we know there is already a struggle to meet housing needs.

“The months following any major event such as the General Election will always cause uncertainty and shake things up for the property market.

“But one thing is for sure – the dwindling supply and already-high demand is an issue that’s going to continue to plague the property market."

Cox said the UK is in desperate need of more housing stock in this country.

“It’s vital that the new government follows their promise of building more houses, so we can free up rental properties and head on the right path to turning the property market around once and for all.”

  • Jon  Tarrey

    This is only going to get worse. The only people who are benefiting from the shocking lack of supply are the landlords, who don't believe they're doing anything wrong - "it's just the market, isn't it? We're taking advantage of it." Greed, greed, greed, plain and simple. When did housing become a commodity rather than a basic right? We're heading back to the Victorian era, bit by bit!

  • Kelly Evans

    Don't blame the landlords, blame the government. It's not the landlords fault that supply levels are so low. They are just offering a service, like any business. For a former member of the industry, you don't half hate property people!

  • Anna  Dickson

    If the demand for property consistently outweighs the ever-diminishing supply, which seems likely, how will London cope? The capital has becoming increasingly unaffordable due to lack in supply, pushing London residents out, with no viable solution at present. A very bleak outlook for the whole country, but the capital especially.

  • Algarve  Investor

    Sad state of affairs, which I can't see getting any better in the foreseeable future. Demand outstripping supply to these levels is not a good thing and can't be sustained.


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