Tenants are running out of homes to rent as demand for buy to let outstrips supply, say letting agents.
Frustrated would-be buyers are heading the queue for rented homes as they struggle to find a mortgage or save money for a deposit.
The Royal Institution of Chartered Surveyors reports 25 per cent more letting agents are picking up more new inquiries from tenants than those logging a fall in demand.
Meanwhile, just five per cent more letting agents are handling new buy to let rental instructions than those reporting no change or a fall for the three months ending July 31, said RICS.
The report also highlights a trend of some landlords, mainly in London and the South East, are selling investment properties as tenancies end, which is cutting the supply of letting properties.
The RICS residential lettings survey also confirmed rents are still rising, with 34 per cent more letting agents saying landlords are increasing monthly rents rather than a fall. This was down on the previous quarter, when 42 per cent of residential letting agents believed rents were on the up.
However, most letting agents predict rents will increase more in the next quarter.
“The combination of strong tenant demand and a limited stock of good quality properties on offer is pushing rents even higher across much of the country,” said RICS spokesman James Scott-Lee.
“The imbalance is set to persist as mortgages for first time buyers is likely to remain in short supply for some time. The inevitable outcome is that rents will continue to increase.”
The survey also unearthed figures showing more tenants are looking for state help to find a home.
Social housing lets were up more than 50 per cent – from eight per cent to 13 per cent of all new tenancies – the highest level since records began in 1999.
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