The UK housing market is experiencing a trend of ‘reluctant tenants’, following a shift in supply and demand for properties, according to the Association of Residential Letting Agents (ARLA).

ARLA’s research, conducted across UK letting agents and landlords, reveals that the surplus of rental property is reducing, while demand for properties rises.

According to ARLA, this shift has generated a wave of reluctant tenants. During Q4 2009 an average 41 percent of members surveyed reported more tenants than properties – compared with just 24 percent last quarter.

In addition, ARLA research among landlords revealed that 54 percent of those asked felt that consumers were being forced to rent rather than buy.

“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,” explained Ian Potter, operations manager at ARLA.

He continued: “This rise in tenants is a positive sign for the industry, as it indicates increased market movement. It also shows that many more people will learn the benefits of living in rental accommodation.

“However, as demand exceeds supply we are faced with a new challenge – how to provide enough good-quality rental properties to meet this demand. These figures confirm our long-held view that a strong Private Rented Sector (PRS) will be fundamental in meeting the accommodation needs of future generations. But without significant government support, the sector will likely struggle.

In August 2007 53 percent of ARLA members surveyed felt that there were more tenants than properties – but this figure then dropped, reaching a low of 10 percent in February 2009. The number of available properties began increasing again last quarter.

ARLA research for the fourth quarter also shows that the period for which properties are unoccupied has fallen once again, with the average void period for the UK down from four weeks to 3.9 weeks, as tenants snap up available properties quickly.

In reaction to ARLA’s figures, Simon Gordon, Head of Communications, at the National landlords Association (NLA), said: “These figures may show some tenants are reluctant to rent, but that doesn’t reveal the true story.

Renting is no longer the ugly sister of the property market. In fact, increasing numbers are attracted to renting, as a simpler, more flexible alternative to home ownership.

“Gone is the view that renting is the only option for those who can’t afford to get on the property ladder. Nowadays there are property savvy renters who prefer not having to worry about home repairs or concerns about making ends meet with potentially volatile interest rates.”