With the General Election drawing ever closer demand and supply in the private rented sector (PRS) are moving in opposite directions, the latest ARLA figures reveal.
Demand for new housing fell 10 per cent in March 2015 to 36 would-be buyers, down from 40 in February, according to the Association of Residential Letting Agents (ARLA) monthly PRS Report.
Supply, on the other hand, grew 4 per cent to 192 properties managed per branch in March, up from 184 a month ago.
The figures also show a continuing growth in rents, with the proportion of ARLA agents reporting higher rents increasing to 32 per cent in March from 31 per cent in February.
Landlords in the North West and East Midlands would be most likely to pull out the market, the report found. Most (84 per cent) of ARLA agents in these regions expressed concern over that happening.
ARLA also asked its members to comment on the housing pledges of the main parties running in the General Election in May.
Three-quarters of ARLA members (74 per cent) said Labour’s proposal for three-year tenancy agreements with rent controls and strict rules to make it more difficult to evict tenants will not actually benefit tenants at all, up from 69 per cent in February.
Nearly four in ten (37 per cent) of ARLA agents agree that the Conservatives’ pledge to build 200,000 new starter homes offered at 20 per cent discount to first-time-buyers would be best for the PRS. This will enable a segment of the current British renting population to get on the housing market, freeing up more properties for renting, helping to ease supply and demand.
David Cox, Managing Director of ARLA comments: “The proposals are aimed at reducing opportunities for landlords to raise rents and to create stability for tenants, as Ed Miliband outlined. However, Labour’s proposals aren’t necessarily the solution. If you put a cap on rent increases above inflation, tenants are likely to experience automatic annual hikes. Whereas, in reality, landlords appreciate good tenants and would avoid raising rents to retain them. Our March report shows that the average time tenants stayed in a property is 17 months and a third (31 per cent) of agents reported that they had successfully negotiated a rent reduction for tenants. So, if this law comes into play, instead of tenants getting a potential reduction, they may be more vulnerable to automatic increases.
“It will be interesting to see what happens on the 7th of May. We need more homes and while house prices are still sky high with no signs of these dropping any time soon; getting onto the property ladder is a difficult feat. Therefore, renting a property is the only option for many. However, we are concerned that current government policy on housing cannot deliver what is required.”
