We had the era of reluctant landlords and now it seems that the market is to be flooded with reluctant tenants. Further to yesterdays blog, the ARLA (Association of Residential Letting Agents) has released research which clearly shows the rise in people who are demanding rental accommodation, and a lot of them would rather be in their own homes.

This includes first time buyers, as I outlined yesterday, but also people who were forced to sell up at the height of the recession.

The ARLA is indicating that the situation is such that there is now a good chance demand for rental properties will soon outstrip supply. In fact, they ascertain that this has already started. During Quater Four, 2009, an average of 41% of members surveyed reported more tenants than properties – compared with just 24% last quarter.

A spokesperson for the ARLA had this comment on why this situation is occurring:

“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”

It is great for landlords to be in the driving seat after a very tough year but it is also a situation that the Government must keep an eye on. To not have enough housing for your population is a very serious problem, indeed.

It is shaping up as a great year for landlords as new tenants flood the market says James Davis, chief executive of online letting agent upad.co.uk. He goes on to add:

“The availability of finance for first-time buyers is still stifling the sales market, meaning would be first-time buyers are being reluctant [to purchase] or forced to rent.”

We all have a lot of sympathy for those people who are struggling to get onto the property ladder. It must be very frustrating especially with the actual price of property being so affordable at the moment. I can foresee a situation where banks finally decide to lend first homeowners money, right at the time of a property price hike, effectively making them much worse in real terms.

The point is, however, that with the attitude the banks have at the moment, a lot of people are unable to purchase their own homes and, of course, they have to live somewhere. This is set to prove a boon for landlords.

There is a bright side as Mr Davies pointed out. Renting is more flexible and at least you know what to budget each month as repairs to things like boilers are issues for the landlord.

From the landlord’s point of view it is great to not have the worry of so many empty properties.