The rental market in the UK has been rising in prominence ever since the financial downturn in 2008. Up to that point, home ownership was seen as one of life's biggest milestones, and people were increasingly looking to own in an affordable marketplace. But ever since, mindsets have changed.
Since the recession, sentiment in the market has taken a turn, and now, more than ever before, people are looking to rent rather than own. Ownership has dropped from almost three-quarters to a little over 60 per cent, and in the same time, the number of people renting property in the private sector has climbed to around five million - the highest it has ever been.
However, one of the biggest challenges that the rental market has faced, and one that it is still struggling with somewhat, centres around supply and demand. While there has been large scale investment in rental homes over the past few years, demand is still far higher than the supply of stock, and it creates an imbalance that is affecting prices.
Rental market in 2017
According to the latest ARLA Propertymark report released earlier this month, the number of prospective tenants has seen a rise in the first month of 2017. For January, it said, there were as many as 34 prospective tenants per letting agent branch in the UK, marking a 31 per cent increase in just one month from December.
There has also been a rise of ten per cent in the number of tenants when compared to the same month a year ago, showing significant rises year-on-year.
And while there has been a rise in the number of properties available in the rental market in the last 12 months - ARLA said supply has increased by 12 per cent year-on-year and three per cent month-on-month, the growth has not been enough to satiate demand from tenants.
"As expected, the New Year brought with it a flurry of activity in the rental market. While supply of rental stock rose slightly, the number of prospective tenants increased by a much bigger margin," said David Cox, ARLA Propertymark chief executive.
"When supply and demand are out of kilter, as they have been for so long now, the market isn’t balanced and fair for tenants, and rent prices will just continue to rise. Worse still, should the government decide to implement an out-right ban on letting agent fees when the consultation takes place, the situation will likely get worse for tenants," he added.
Rent rises have already been in evidence so far in 2017 thanks to the supply and demand problems. ARLA said that in the first month of the year, as many as 23 per cent of agents reported seeing tenants experience a rise in the price they are paying for rent.
And although this is less than the 30 per cent who said the same a year ago, the problem with supply and demand being off balance creates a problem that needs to be addressed with schemes such as tax breaks, for example, allowing investors an easier route to market and helping them to make the sector better for everyone.