The number of properties being registered to rent over the past year has hit a record low for the last 12 months despite growing demand.
The Association of Residential Letting Agents (ARLA) says that the number of homes to rent that have been registered with letting agents dropped by 5% in January. Agents say they have, on average, 172 rental properties on their books - an average of 10 properties down on the previous month.
When the figures are analysed, Scotland has a higher than average figure with 280 properties per branch, while London letting agents say they have only 116 properties available per branch.
However, the demand from tenants for private rented accommodation grew in January with an average of 31 new prospective tenants being registered per branch. That's still not as high as the levels that were being reported last year.
Rents are rising in line with demand
Letting agents in the UK are also reporting that rents are rising in line with demand, with 30% of ARLA's members saying rents increased in January - that's the highest reported figure since September last year.
ARLA’s managing director, David Cox, said: “The supply of housing is a continuing problem which tenants must bear as there are more people competing for rental properties at higher rents. Most tenants find that it's impossible to save money towards buying their own home.”
He added that a recent survey by ARLA revealed that a fifth of tenants believe they would never have enough money to buy their own home, and that tax changes on buy-to-let properties will push landlords from the market to reduce housing supply even more.
Despite the tax hike in buying second homes, 47% of ARLA's members said they had seen an increase in the number of buyers wanting to invest in a buy-to-let property before the April deadline, a rise from last month’s figure of 24%.
Mr Cox added: “We are concerned that by penalising buy to let landlords there will be an impact on those entering the rental market and rents will increase as landlords seek to recoup costs. We need more homes; it is as simple as that.”
Rent Smart Wales comes under scrutiny
Meanwhile, the Welsh government has commissioned research into how the Rent Smart Wales scheme is performing. Researchers will now question landlords with buy-to-let properties in Wales about their experiences of the scheme and how changes were introduced.
All landlords in Wales who rent out property must now register with Rent Smart Wales as part of a licensing agreement which sees landlords completing training so they can manage their tenancies successfully.
The training also means they can keep within the law and maintain their rental property in a good state of repair.