Rental demand reached a record high of 88 prospective tenants per letting agency branch in January, up 57% from an average of 56 tenants per branch a month earlier, according to ARLA Propertymark.
But while the demand for rental accommodation grows, the supply of rental stock continues to fall, hitting its lowest level in seven months in January.
The number of properties managed per branch fell from 206 in December to 191 last month.
Supply has not been this low since July last year when it stood at 184.
The widening supply-demand imbalance in the PRS is placing upward pressure on rental prices, with the number of letting agents witnessing rents increase hitting 42% in January, compared to 32% in December last year.
David Cox, ARLA Propertymark chief executive, commented: “This month’s results are a huge blow for tenants. With demand increasing by more than half, but rental supply falling, rent costs are unsurprisingly being pushed up.
“Our recent research found that tenants could miss out on nearly half a million properties as more landlords exit the traditional private rented sector and turn towards short-term lets which will only serve to worsen the problem for those seeking longer-term rental accommodation.
“With the Spring Budget around the corner, it’s important that the Government works to make the private rented sector attractive to landlords again, rather than introducing complex legislation which ultimately squeezes the sector and leaves tenants worse off.”