Demand for rented homes is 10% higher on average than this time last year; meanwhile, a third fewer homes are available for rent than normal, creating a major issue with supply and demand.

“The rental market has been running very hot over the last year,” said Richard Donnell, Zoopla’s executive director of research. “It’s a growing area of concern for renters who face a market with 33% fewer homes for rent than normal. Government policies to support economic growth have boosted demand for rented homes at a time when the number of homes for rent has hardly changed since 2016.”

“Low supply exacerbates rental growth,” he added. “In local areas where rents for new lets have jumped the most, there is a risk that rents may over-shoot sustainable levels.”

At the same time, higher borrowing costs have made it harder for some renters to leave the sector, keeping them trapped in the market.

Although Zoopla’s report predicts that rental inflation for new lets will slow down to between 4-5% by the end of the year, a decrease that’s likely to be most significant in inner London and other popular areas, they are still expecting rental properties to remain scarce, “given the weaker economics for investors” against a turbulent financial backdrop. Demand, therefore, is still likely to remain above the five-year average.

Rising rents and low supply: a new report predicts the state of renting won’t improve any time soon