Lack of supply in the rental market over the last quarter has seen the number of new rental properties entering the market fall by 20 per cent, according to research by Countrywide Residential Lettings (CRL) which surveyed more than 200 of its offices.

New tenant enquiries increased by 11 per cent whilst the number of new rental properties fell by 20 per cent. The South East region had the highest proportion of new tenant enquiries, with 3.3 tenants vying for every new property. John Hards (pictured) Co-Managing Director of CRL said, “Early signs of an economic recovery have had a significant impact on the number of new instructions but tenant demand remains strong – pushing rental values up in key areas such as London, Southampton and Bristol.

"The rental market is now in the midst of a correction as the excess supply of properties is disappearing and rental stock is coming under increased demand.” CRL helps more than 50,000 landlords and tenants every year and the current high levels of demand is halving the time it takes to rent new properties entering the market – up to 54 per cent quicker.

The statistics also confirm that two bedroom houses are now in most demand – a first for CRL, which has traditionally seen flats/apartments generate the greatest tenant interest. John Hards summarised; “The rental market is at crossroads, the economy is fragile and unemployment is still rising. We are already seeing the first signs of rent increases due to strong tenant demand, and this looks set to continue, which offers landlords and buy to let investors’ new opportunities to capitalise and increase their rental yields.”

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