2nd March 2011
ARLA says the lack of new rental stock for the private rented sector was a dominant factor in the market last year, and will continue well into 2012 because of the broader issues of diminishing housing supply and lending drying up.
ARLA operations director Ian Potter says: "The Leader of the Labour Party, Ed Miliband, recently flagged research that shows 41% young low-to-middle earners live in privately rented accommodation compared with 14% in 1988. This trend looks set to continue while mortgages are so hard to come by and the capital barriers to home ownership appear so entrenched."
The majority of ARLA member offices (59%) believe that demand for rental property will continue to outstrip supply in 2011. Almost four in ten ARLA offices believe that more private landlords will enter the market over the next 12 months.
The predictions come at a time when tenants are already struggling to find good rental property at affordable prices.
Whereas gazumping used to be the preserve of homebuyers, it's now moved to the rental sector. According to research by FindAProperty, one in eight renters, or 13%, say they've been gazumped on a rental property in the past 12 months, while 26% have admitted to being the gazumper – by placing a higher bid at the last minute to snatch a rental property away from someone else.
Meanwhile Consumer Focus is pushing for a ratings site to be set up to help private renters find good landlords. According to the consumer watchdog, one of the biggest issues is that private renters often know very little about their landlords before signing a tenancy agreement. It has written to some of the largest letting agents and deposit schemes in England calling on them to explore how online feedback could empower tenants by giving them a better insight into their potential landlords.
Consumer Focus' report – ‘Opening the door' – outlines the information imbalance which it says works against consumers in the private rented sector. Just 15% of tenants surveyed were able to find all of the information they wanted about a prospective landlord or letting agency. Over a quarter could find very little or even no information and a third who had found information obtained it from the landlord themselves. By contrast landlords or letting agencies can ask tenants for references, deposits, guarantors or other personal and financial information.
Claire McAnulty, policy expert at Consumer Focus says: "Currently the landlord is firmly in the driving seat despite rent being a massive outgoing for many of us. People often sign up with little more than a gut feeling after a cursory tour of the property – if they are lucky, they might have a word of mouth recommendation. The best way to help private renters is to ensure they have the information to know what they are getting into.
"There is huge potential for a feedback website to give tenants a better idea of whom they're renting from. Getting behind a feedback website could also help the industry establish a better reputation and build up much-needed trust with renters."
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