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Research suggests tide is turning in rental sector

While this indicates that demand is still robust, the figure is sharply down on Q3, when three quarters (74%) of members noted that trend.

The number of consumers actually signing a new tenancy was consistent with Q3, with an average 34 new tenancies signed per ARLA member office during each quarter. The figure was lowest in Central London, where an average 26 tenancies were signed per branch during October – December, compared with an average 31 in Q3.

Over the same period, 39.2% of members reported an increase in tenants struggling to pay their rent; up from 36.7% the previous quarter.

Tim Hyatt, president of ARLA, said: "The apparent drop in demand for rental properties could be due to the traditionally quite pre-Christmas period. At the same time, it could indicate a reversal of the surge of new tenants who turned to the PRS when they could not afford to buy.

"With household income decreasing and job uncertainty prevailing, it could be that increasing rental arrears is a sign that the wider economic malaise is having a tangible impact on personal finance – some consumers may have reached the limit of their access to finance, while others may be cutting back as many commentators have predicted.

"We are reassured by the fact that the number of new tenancies is stable, but we will be watching the market closely in the coming months to determine how significant these latest figures will prove to be.

"In tough economic conditions both landlords and tenants can find themselves struggling to keep up with rent or mortgage payments. It is therefore more critical than ever to take references and conduct thorough research before signing a tenancy agreement. Seeking advice from a professional, licensed letting agent is the best way to ensure tenants and landlords’ rights are protected."

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  1. We are finding that our 60 branches across the South are still experiencing strong demand for all types of rented accommodation, from one and two bedroom flats to large family homes. At the same time, there are positive signals that the supply of rental property is set to increase. We are seeing a definite increase in enquiries about buying to let from both new investors and existing landlords looking to expand their portfolios. We are also continuing to take on properties to let from people who want to move and are choosing to rent out their homes instead of selling. An increase in rental properties will be very welcome and facilitate more movement for those relying on rented accommodation over the medium to long-term. Many couples and families need to move up the rental ladder to larger properties which will ensure continued demand across all property types.

    Despite a background of rising unemployment, high inflation and stagnant pay, our landlords have experienced very low levels of tenant arrears, with only 4 per cent of more than 20,000 tenancies ithat we look after in arrears as of November 2011. This is significantly lower than across the wider industry and is testament to the effectiveness of our stringent tenant referencing procedures and swift action to resolve problems when arrears do occur.