Tenants are facing increasing competition as supply in the private rented sector contracts, according to the Association of Residential Letting Agents (ARLA).

The organisation’s latest quarterly research found that 59% of respondents reported more would-be tenants than properties available. This figure represents the second successive increase, from 46% in Q3 2013 to 54% in Q1 2014. Tenants are also less likely to haggle for properties, suggesting that the lack of supply is restricting the potential for negotiation. The number of respondents who have seen an increase in tenants haggling with landlords over rents in the last 6 months has fallen from 44% to 33%.

This rising competition for properties is compounded by the fact that over half (51%) of all landlords are not expecting to increase the size of their rental portfolios. At the same time almost one in five (17%) are expected to 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.”