The number of homes available to rent in the UK dropped in February to a 21 month low which letting agents suggest could be due to the new minimum energy standards that come into effect on this Sunday.
Many landlords are not yet prepared for the introduction of new energy efficiency standards for buy-to-let properties from 1st April, and the latest report by ARLA Propertymark, the professional body for letting agents, says that this contributed to a sharp fall in the supply of new rental accommodation last month.
Overall the volume of rental properties letting agents managed fell by 5% in February with 175 on average per branch compared to 184 in January, the lowest level since May 2016 when it stood at 171.
The monthly data from ARLA Propertymark also reveals that demand for rental accommodation also dipped in February. On average, letting agents registered 61 prospective tenants per branch in February, compared to 70 in January, a 13% fall.
Some 20% of tenants, one in five, experienced rent rises in February compared to 19% in January and down from the 25% recorded in February last year, 29% in the corresponding month in 2016 and 31% in 2015.
David Cox, ARLA Propertymark's chief executive, commented: “This month’s results continue to show a drop in the supply of rental properties and this is no surprise; the minimum energy efficiency standards come into effect in April meaning all rental properties must be EPC rated E or above.
“The dip in supply indicates that landlords are cutting it fine and taking their properties off the market to make the necessary changes before the deadline – but we could also see up to 300,000 properties taken off the after the deadline passes on Sunday because they don’t reach the minimum requirements. This is also likely to push rent costs up as competition heats up among prospective tenants.
“We could have a supply crisis on our hands and for landlords who haven’t yet started to upgrade their properties, now is the time to act and fast.”