Rental property demand hit two-year low in December

Rental property demand hit two-year low in December [Photo: Richard Sharrocks via iStock]

Rental properties may be quickly becoming the most popular way to live in the UK, but a new report has shown a surprising dip in demand from tenants towards the end of the year in 2016.

According to data published by the Association of Residential Letting Agents (ARLA), the number of potential tenants per letting agency branch fell markedly to just 26 on average in December 2016. It said that this was the lowest reading recorded since January 2015, leaving the market at a two-year low in terms of demand. 

This also represented a 19 per cent fall month on month, although this is to be somewhat expected given the fact that in the year before, demand for rental homes in December was down 15 per cent when compared to November. 

The bad news for tenants, however, is that while the demand for homes has dropped off somewhat in recent months, the simultaneous fall in property availability in the rental market has meant that the cost of renting has headed in the opposite direction. 

According to those surveyed by ARLA, the number of letting agents across the country who experienced tenants seeing their rents hiked rose from three to 19 per cent in December. This could largely be put down to the fact that there has been a fall in the number of rental homes that are on the market, a reading that hit just 185 per branch in December. 

"Although December’s figures could indicate a bright future for renters, with the government’s impending ban on letting agent fees, the future is actually rather bleak for the UK’s renters," said David Cox, ARLA managing director.

"Although we saw demand fall and supply rise slightly last month, these are in line with seasonal expectations and is what we expect to see in December. If the government goes ahead with an outright ban on fees, tenants will unfortunately be the ultimate victims, as costs are recouped for the vital services fees cover."