The supply of rental properties has fallen to its lowest level for a year and experts warn the Chancellor's tax crackdown could worsen current shortages.
The latest private rental sector report from the Association of Residential Letting Agents (ARLA) shows an average 172 properties available to rent per letting agent, 10 fewer than in December.
The supply of rental accommodation has now fallen to the lowest since records began a year ago.
Demand for rental accommodation picked up in January following a seasonal lull in December, with an average of 31 prospective tenants now registered per branch.
However, it remains below the high levels reported in January and February last year, when there were 38 and 40 tenants registered per branch.
ARLA also reported an uplift in interest from buy-to-let investors ahead of the surcharge on stamp duty, which comes into force on 1 April.
ARLA managing director David Cox said that nearly two thirds of its members think the Chancellor’s stamp duty reforms will push landlords out of the market, which will in turn cause supply to drop further.
Nearly six in 10 believe the reforms will push up rent costs.
Its figures also show that 47% of ARLA agents reported an uplift in interest from buyers looking to invest in buy-to-let properties before 1 April, up from 24% last month.
Cox added: “Efforts to penalise buy-to-let landlords will ultimately impact those entering and currently in the rental market, as landlords will seek to recoup their costs by increasing rents.
“Rent costs are already rising exponentially, and tenants are feeling the strain of a crowded marketplace. We just need more houses, it’s as simple as that.”