Tenants are competing harder than ever for rental homes, with 59% of buy-to-let landlords reporting demand for property overtaking supply in the second quarter of the year, up from 54% in the first quarter and 46% in Q4 2013.

According to the latest report from the Association of Residential Letting Agents (ARLA), tenants are less likely to haggle of the level of rent charged as a result. At the start of 2014, 44% of tenants negotiated on rent – that figure has now dropped to 33%.

Competition for rental properties is exacerbated by the fact that over half (51%) of all buy-to-let landlords do not plan to increase the size of their property portfolios over the next year, and almost one in five (17%) say they will sell one or all of their properties in the next 12 months. This figure is the highest since Q1 2008, when the figure stood at 18%.

Ian Potter, managing director of ARLA, said:

“Supply in the rental sector is suffering from the buoyant housing market, and there is a concern that some tenants may now face increased competition for the properties they want. While the departure of reluctant landlords is positive for those who are now able to sell, there is a risk of a supply gap opening up in the private rental sector. Investing in new schemes such as build-to-rent could be one way to alleviate a lack of available rental properties if this trend continues.”