That is the assumption made by the Association of Residential Letting Agents (ARLA), who conducted research across UK letting agents and landlords to reveal that the surplus of rental property is reducing, while demand for properties continues to rise.

’New tenants include those homeowners who were forced to sell their home during the last year either due to financial instability or a job-move. And many people now in a position to buy are struggling to find the right property, as there is also a shortage of both properties for sale and realistic mortgages,’ explained Ian Potter, operations manager at ARLA.

House Prices - UK Property Market Latest News

According to ARLA, this shift has generated a wave of reluctant tenants. During Q4 2009 an average 41% of members surveyed reported more tenants than properties - compared with just 24% last quarter. In addition, ARLA research among landlords revealed that 54% of those asked felt that consumers were being forced to rent rather than buy.

In August 2007 53% of ARLA members surveyed felt that there were more tenants than properties - but this figure then dropped, reaching a low of 10 per cent in February 2009. The number of available properties began increasing again last quarter.

ARLA research for the fourth quarter also shows that the period for which properties are unoccupied has fallen once again, with the average void period for the UK down from four weeks to 3.9 weeks, as tenants snap up available properties quickly.

UK Property Latest: Rent vs Buying

Simon Gordon, Head of Communications at the National Landlords Association argued that while the figures may show that some people in rented accommodation may be reluctant to rent, it cannot be taken as the full story.

’Renting is no longer the ugly sister of the property market. In fact, increasing numbers are attracted to renting, as a simpler, more flexible alternative to home ownership,” he said.

’Gone is the view that renting is the only option for those who can’t afford to get on the property ladder. Nowadays there are property savvy renters who prefer not having to worry about home repairs or concerns about making ends meet with potentially volatile interest rates.’

RICs argued earlier this month that there are now more people looking to buy property rather than sell their homes in the UK so it will inevitably lead to house price rises as demand outstrips supply.

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