The report identifies rising demand overtaking supply as the primary reason behind the rental market inflation. Various market surveys by the likes of the Royal Institute of Chartered Surveyors (RICS) have shown that demand increased during the three-month period leading up to August this year, although the Association of Residential Letting Agents (ARLA) recently revealed figures that indicated a marginal decrease of demand during the month of July.

Both the organisations mentioned above have also confirmed that there is a general disparity between supply and demand in the rental sector, though they disagree on exactly how big the difference is. While RICS report that supply has significantly fallen off up to August, ARLA have reported an increase during July, though the supply is still not quite meeting demand even during the best of recent months.

Increase in Buy-to-Let Purchases Has Had ‘No Discernable Effect’

The successful entrepreneur and founder of Platinum Property Partners, Steve Bolton, said of the recent rental rate rise, “The surge in buy-to-let property purchases following April’s stamp duty changes has not had any discernible effect on the cost of renting and this trend isn’t likely to reverse any time soon, particularly as legislation planned for 2017 threatens to reduce rental stock and push prices even higher.

“The reduction of buy-to-let mortgage interest tax relief will make some landlords unprofitable, forcing them to pass on costs to tenants in the form of higher rents just to stay afloat. Even those who can still operate may be deterred from making further investments, reducing rental stock at a time of severe property shortage.”

Private Rental Still a ‘Valued Service’

With the new legislation meaning rental rates are likely to continue increasing, it seems that many tenants will soon be faced with difficult decisions with regards to where they rent. However, Mr Bolton was quick to point out that there is still a lot of value for tenants who intend to remain in the private rented sector.

Mr Bolton continued, “Although depicted as the undesirable alternative to home ownership, rental accommodation is a service valued by many, particularly young professionals looking for flexible accommodation or those not ready to commit to

the property ladder just yet. However, it’s important that tenants are not prevented from saving for the future by excessive rental prices.”


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