The Association of Residential Letting Agents (ARLA) has released its quarterly review and index for the first three months of 2013. Among the notable findings is the increase in the length of the average tenancy to just under 20 months.
The findings, which are collated from 527 ARLA member offices, showed an increase from 19.2 months in the fourth quarter of 2012 to 19.7 in the first quarter of this year. Members also noted the following:
- a decrease in the average void length (from 3.0 weeks to 2.9 weeks);
- a decrease in the average number of new tenancies (from 36 to 32);
- an increase in the number of agents claiming that there are more tenants than available properties (from 55% to 57%); and
- a sharp decrease in the number of agents who think that more rental property is coming onto the market because it cannot be sold (from 42% to 29%)
One immediate implication of this data is that the number of ‘accidental’ investors, who turn to the rental sector because they cannot sell their main home, is falling; perhaps due to the increased availability of residential mortgages. The other clear implication is the current situation of private tenants; that they either cannot or do not wish to move, and that this is fuelling a shortage of private rental housing.
“Our [ARLA’s] data suggested that tenants are increasingly sitting tight in their property and either reluctant, or unable to move. This stagnation means fewer and fewer properties are freed up.
“We know that many tenants renting with ARLA member agents are 'frustrated first time buyers' so it will be interesting to see if the recently announced Government initiatives such as 'Help to Buy' will impact upon these numbers.”
Ian Potter, Managing Director of ARLA
The situation is something of a vicious cycle; the number of tenants who do not wish to move due to competition for private tenancies is decreasing the number of vacancies, which in turn increases competition for the fewer properties that remain. Increased mortgage availability, further construction of new, affordable housing, and the emergence of new rental property in the sector are likely to be the measures that ease the burden on struggling tenants.