As a result of sliding property prices and a lack of available mortgage finance the number of people looking to rent a property has increased by 39% in just 12 months.
According to the flat and house share web-site spareroom.co.uk this rise in potential tenants could force the rental market into crisis unless more rental stock comes to market.
Their figures, they say, show that the number of people looking for rooms to rent this year is 13% higher than the same period last year. It is also a huge 61% higher than the same period in 2009.
But at the same time there has been a 15% fall in new rental stock compared to the same period in 2010.
There are now, says spareroom.co.uk, five applicants for every room available to rent in the UK with an average monthly room rent of £351. This could mean that we will see significant rises in room rents in the coming months.
Director of spareroom.co.uk, Matt Hutchinson, said 'The rental market is groaning under the strain of too little stock and too many people looking to rent, and the situation is unlikely to improve any time soon. Inevitably, what is happening in the residential property market has a lot to do with what we're seeing in the rental sector.
'People who would normally be looking to buy their first property after renting for a few years, and are either unable to because they can't secure a mortgage, or are reluctant to because of all the uncertainty surrounding interest rates and property prices, are renting for longer as a result. The knock-on effect is that existing rental properties are remaining off the market longer, and with fewer new rental properties becoming available, the supply-demand balance is completely off kilter.
'If that isn't bad enough, average rents are rising at a rate of knots, by as much as 20-30% in the most sought after areas. This means that for many people who are hoping to save money for a house deposit by renting in the shorter term, they could find that their deposit funds are eroded by having to cover higher monthly rental costs.'
This is something that we have always said would happen. More people spending more time renting rather than owning and far fewer people ending up owning their own homes at the end of the day. Something that had to occur when the lending rug was pulled together with a government policy that favours high house prices.