Having been swamped by large numbers of properties put up for rent by ‘forced’ landlords who were unable to sell, FindaProperty’s latest rental index suggests that the UK rental market is beginning to return to normality.

The supply of rental properties more than doubled between May 2008 and May 2009 (+119%), as people who could not or chose not to sell looked for tenants instead, the so-called reluctant landlords. Two months of easing stock levels - which have declined by almost -2% - provide an early indication that this oversupply of rental homes is correcting itself. Estate agents report that this has been helped by reluctant landlords returning to a sales market that is showing renewed signs of life.

This tightening of supply is coinciding with the traditionally busy early summer rental market, with rising demand from tenants translating into a modest pick-up in rents sought by landlords, after six months of steadily falling rental values. Rents fell between May 2008 and May 2009 on the back of excess supply, with a decline of -5.5% or £48pcm. Since then they have risen by +£6 - a small but significant recovery, suggesting perhaps that the tide is turning, according to FindaProperty.

Michael O’Flynn, director of FindaProperty, said: “The flood of rental properties put on the market by reluctant landlords is starting to subside so rents are no longer in free fall, and indeed are starting to recover. If the sales market continues to strengthen as it has done since April, this is likely to further support recovery in the rental market as landlords are encouraged to sell before interest rates start rising, reducing rental supply.”