While tenant demand remains at its highest level for five years and rents are rising proportionately, more than seven out of ten letting agents have reported that investment landlords are marking time before making buying or selling decisions.
As a result, the proportion of investment landlords who are selling has fallen from 21 per cent to 16 per cent and buying from 16 per cent to just 11 per cent.
Two thirds of central London letting agents have too many tenants to satisfy, while 57 per cent of those operating in the South East have noted the same lack of supply.
Indeed, London is currently in the grip of the most dramatic turnaround in the balance between supply and demand, with demand increasing thirteen times over supply during the past five years. Immigration and in-migration are both key factors in this upsurge.
“This peak demand should come as no surprise,” said Ian Potter, head of operations for ARLA. “It has been driven up by the many competing demands for rental accommodation and now we have softening house prices. Softening in the sales market is always a driver of further demand in the rental market.”
Tenants continue to stay in properties for well over a year, regardless of the length of their initial agreement which is commonly for six months.
Void periods remain at well under a month. This decline in the length of time properties are empty has been declining steadily from an average of nearly five weeks.
“These latest figures confirm that the private rented sector will once again be the safety valve for a housing market worried by the current financial uncertainties and the softening of house prices," concluded Potter.
