Published on : Fri, 16 Sep 2005 13:36GMT
by : Lisa Pitt

The number of people opting for property on lease seems to be mounting by each passing day, only leading to a dearth in the availability of rental property in the country.

The Association of Residential Letting Agents (ARLA) said in its quarterly report that the supply of rental property was falling considerably short of the amount of demand for it as people choose to rent rather than buy. Therefore, it goes without saying that rents would increase due to the situation of a higher demand and lower supply of property to rent in the UK.

The study saw first-time buyers increasingly contemplating leased property since they could not afford to get on the property ladder even in the present state of market stagnation due to inflated asking prices combined with market uncertainty.

Meanwhile, chief executive of the Arla, Adrian Turner warned that property could be needed urgently to meet the rising demand for property on rent and said, “This very healthy balance between supply and demand could well indicate that it may not be long before there is a shortage of property in the private rented sector.

He added, “This reflects both the softening of house prices and the shift towards renting. More people see renting as the socially acceptable flexible alternative to owner occupation.”

While ARLA asserted all areas had witnessed the rising demand trend and had reported insufficient property supply, saving London and the southeast, a majority of agents in the country said that sizeable increments in rent had been recorded, especially for areas in the capital. In fact, there seemed to be a flurry in the buy-to-let sector after quite some time, with new property investment products being introduced by financial providers who were now making a comeback into the sector after writing it off earlier.

The report showed a further increase of 10% in the average amount of tenancies posted by letting agents, of 30% to 33% in the quarter. However, the average empty or inactive period remained consistent at 27 days.