Reluctant landlords start slow exit from private rental sector

The number of reluctant landlords in the private rented sector is falling, latest research from the Association of Residential Letting Agents reveals.

Over the past three months ARLA member offices have reported a decrease from 26% to 21% in the proportion of rental property coming onto the market because it cannot be sold. This also represents a sharp drop of 21% on the figure of 42% recorded last year.

As these reluctant landlords stop entering the sector, tenants are still faced with strong competition for rental homes. Some 52% of ARLA members said there were more tenants than properties available. While this represents an incremental fall on tenant-property ratio from the 54% recorded in the previous quarter, this statistic shows that PRS accommodation remains in high demand.

The South East (excluding London) has the highest proportion of members reporting more tenants than properties (67%), whereas London, surprisingly, has the lowest, with just 17% experiencing this trend.

Despite this competition among tenants for properties, there has been an overall fall in the number struggling to meet rental payments.

The current figure of 35% remains high, but represents a fall of 5% from the figure of 40% recorded at the same time in 2012.

Ian Potter, managing director, ARLA, said: “Much has been written recently about the recovery of the residential sales market, and it would appear that these effects are now being felt in the private rented sector. While the departure of ‘accidental landlords’ from the sector will be a good thing for the individuals concerned, there is a real and on-going worry about the level of rental properly supply across the country.

“With competition for the best properties remaining fierce, landlords and tenants alike can benefit hugely from seeking the advice of an ARLA agent. All ARLA licensed agents must adhere to a strict code of conduct, as well as offering client money protection and redress schemes, which protect all parties if things go wrong.”

Peter Lawrence at Lawrence Rand added: “The private rental sector has grown significantly in recent years and has provided a short term solution for many reluctant landlords. It is no surprise to see their numbers reducing as opportunities to buy and sell improve but the underlying rental sector remains very strong and an important part of the mix of tenures needed in the UK as part of a strong and flexible housing market.”