Rental market 'may bottom out'

The rental market may have bottomed out, figures suggest

The rental market showed signs of stabilising in May with average rents remaining unchanged for the first time in nine months, research has shown.

The average cost of a rented property was £819 during the month, unchanged from April and the first time since August 2008 that the cost has not fallen, according to website FindaProperty.com.

The rate at which people are putting properties up for rent also eased in May, in a further sign that the bottom of the market may have been reached.

The total number of properties available to let rose by 2.7% compared with the previous month, well down on the 14.5% jump in availability seen in May last year.

The number of rental homes has soared since house prices first started to fall, as people unable to sell their home opted to rent it out instead.

The supply of rental property more than doubled in the past year, leading to a 6% fall in average rents.

The dramatic rise in the number of homes available to rent has increased competition for tenants, leading to the average time a property is empty between lets increasing to 65 days in May, 16 days longer than a year earlier.

Andrew Smith, head of research at FindaProperty.com, said: "A slowing in the increase of supply and signs that asking rents are beginning to stabilise indicate that we may be close to the bottom of the market.

"However, the house and flats markets continue to polarise, with houses starting to show a sustained recovery thanks to falling supply levels and rising prices, whilst the flat market seems to be lagging behind with increasing supply levels and asking rents that continue to fall."

The number of houses available to rent fell for the third month in a row in May, dropping by 1.2%, while the average rent edged up by 0.1% to £848. But the supply of flats jumped by 5% during the month, with a 0.3% reduction in average rents to £758.