The average time it takes to let a home dropped to a record low of 20 days during the first seven months of the year.

A combination of increased demand from tenants and falling supply as landlords exit the sector led to rental properties being snapped up quickly, according to Hamptons International.

While one-bedroom properties took the least time to let between 2014 and 2018, three-bedroom homes were moving quickest during the seven months to the end of July, suggesting a shift in tenant mix.

Unsurprisingly, the mismatch between supply and demand is pushing rents higher, with the cost of being a tenant rising by 1.9% in the year to July to average £982.

Why is this happening?

The rental market is currently experiencing strong demand as stretched affordability prices many people out of buying a home, while uncertainty over Brexit is causing others to put moving plans on hold.

Hamptons said it had seen a 5.6% increase in applications from potential tenants during the seven months to July.

At the same time, a combination of tax and regulatory changes have caused landlords to exit the sector and sell their properties, with Hamptons seeing a 5% fall in stock levels so far this year.

The fact that more tenants are chasing fewer properties has led to homes being let quicker.

Who does it affect?

The amount of time taken to find a tenant fell in every region of Great Britain during the first seven months of the year.

Finding tenants was quickest in the south west and East Midlands, at an average of just 18 days.

Landlords had to wait for the longest to find a tenant in the north east, but even here the process only took 24 days, and was still four days faster than it had been a year earlier.

London saw the biggest decline, with it taking just 19 days to let a property in the capital, six days quicker than during the same period of 2018, with properties in Hillingdon let within 9.5 days on average.

What’s the background?

Strong demand from tenants led to rents rising in nearly all regions of Great Britain.

Scotland saw the strongest year-on-year rise with rents increasing by 5.2%, followed by the south west at 4.7% and the south east at 4%. The Midlands was the only region to buck this trend, with rents decreasing by 2.7% in the past 12 months.

In terms of property types, the cost of renting a one-bedroom home rose by 2.8% year-on-year, compared with a 1.3% rise for three-bedroom homes.

Hamptons said this trend had contributed to more tenants looking to rent a larger property as a group, rather than a one-bedroom flat on their own.

New-build homes are selling for a premium of more than £65,000 compared with existing housing stock.

The average UK new home sold for £290,176, compared with a typical sales price of £224,729 for older properties, according to the latest figures from the Land Registry.

The premium buyers pay for a new build home has increased by £5,000 during the past year.

Historically, the price of new build and existing properties has been much closer, with buyers more likely to pay a premium for a home that is being resold.

Why is this happening?

A number of different factors are likely to be behind the strong price growth for new-build homes in recent years.

On the one hand, the higher price of new builds is likely to reflect the fact that housebuilding activity is currently concentrated in southern regions, particularly London, where property values are higher.

In fact, figures from the NHBC show that in the three months to the end of June 6,000 properties were built in London and 6,584 in the south east, compared with just 1,226 in the north east and 1,954 in Yorkshire and Humberside.

Some of the premium can also be accounted for by developers targeting the high-end of the market and building luxury homes in some locations.

But there are suggestions that the Government’s Help to Buy equity loan scheme is responsible for driving prices up in the new build sector, as the initiative only applies to new build properties.

Some studies claim the popularity of Help to Buy has created a mismatch between supply and demand, driving up the cost of new builds.

What advantages do new-build homes offer?

Potential buyers will have to think carefully about whether or not paying the new-build premium is worth it for them.

For first-time buyers who want to take advantage of the Help to Buy equity loan scheme the lure of a five-year interest-free loan worth up to 20% of their home’s value may well make it worthwhile.

This is particularly true if it enables them to purchase a bigger property, meaning they will need to make fewer moves up the housing ladder.

New-build homes come with other advantages too, as they are typically more energy efficient than older properties, while they require less maintenance and have a 10-year building warranty from the NHBC.

As a result of these factors, they tent to have lower running costs compared with existing housing stock.

Some new builds, particularly apartments, also come with significant amenities, such as gyms, swimming pools and even cinemas.

Finally, new developments may offer property types that are not currently plentiful among the existing housing stock, such as starter homes or detached family properties.

What are the downsides?

Unfortunately, new build properties do have some downsides as well.

While in theory no decorating should be required, in practice many homeowners have to go through the process of snagging with the developer, to sort out issues that may have been overlooked.

New build properties are also more likely to be leasehold than existing ones, which, particularly in the case of houses, tend to be freehold.

It is worth noting, however, that the Government is currently consulting on whether the majority of new-build houses should be sold as freehold.

Finally, new build properties are often smaller than their older counterparts as developers try to fit more units on to a site.

Prospective tenants could soon check out be able who they are renting from if new government proposals come to pass.

The plan is for a database of rogue landlords, charting misdemeanours such as being banned for failing to provide habitable homes, would be opened up to those looking to rent.

The current Rogue Landlords Database is only open to local authorities and since launch last year, has only registered 10 names.

The initial proposals would only apply in England because of devolved housing policy.

"This database has the potential to ensure that poor quality homes across the country are improved and the worst landlords are banned,” said Communities Secretary James Brokenshire.

“It is right that we unlock this crucial information for new and prospective tenants. Landlords should be in no doubt that they must provide decent homes or face the consequences."

There are now more than four-and-a-half million households renting in England, with house prices out of reach for first time buyers being cited as a key reason for the rise.

A 12-week consultation on the plans will also consider whether to widen the scope of the rogue landlords list to more housing-related offences, such as breaching the Tenant Fees Act.

The rental market has been in the spotlight for reform in recent months with pressure to end no-fault evictions, which allow landlords to get rid of tenants without a reason after their fixed-term tenancy period has ended.

More than 120,000 buy-to-let properties are thought to have been sold by landlords since the Government imposed higher taxes on the sector.

Analysis of UK Finance data by Savills found that 120,000 buy-to-let mortgages have been redeemed in the past two years.

The group blamed the situation on the raft of tax changes and new regulations introduced in the past three years which has made the sector significantly less attractive for individual investors.

The research comes as figures from the Office for National Statistics showed rents climbed at their fastest rate for 18 months in May.

The average cost of letting a home increased by 1.3% year-on-year, the biggest annual jump since November 2017.

Property commentators have warned that a mismatch between supply and demand is being created as landlords reduce their portfolios or exit the sector altogether, putting upward pressure on rents.

Investors are also thought to be hiking their rates in response to the higher costs they now face.

Why is this happening?

The Government has introduced a number of tax and regulatory changes to the buy-to-let sector which makes it significantly less profitable.

Among the changes are a 3% stamp duty surcharge on the purchase of additional properties, introduced in April 2016, a tapering of mortgage interest tax relief and an end to the ‘wear and tear’ allowance.

Other changes include a ban on charging fees to tenants, a limit on the amount tenants can be charged to repair minor damage to properties, and a requirement for more landlords to upgrade their properties to make them energy efficient.

Who does it affect?

The situation is bad news for both landlords and tenants.

As a result of the subdued state of the housing market, buy-to-let investors are no longer making significant capital gains on their portfolios, meaning they have less incentive to hold on to rental properties on which they are only breaking even or incurring a slight loss.

As a result, many are selling up. This means there are fewer homes available to rent, which is, in turn, pushing up the cost of being a tenant.

However, first-time buyers, who no longer have to compete against landlords for properties at the bottom of the housing ladder, could benefit.

What’s the background?

With private landlords exiting the sector, Savills is predicting ‘build to rent’ investors will step in and fill the void.

The properties are high quality and professionally managed homes that have been built specifically for renters. They have corporate landlords and longer tenancies, as well as a typically offering a range of extra facilities.

While there are currently only 30,000 build to rent homes that have been completed, with another 110,000 in the pipeline, Savills estimates there could be 1.7 million homes when the sector reaches maturity, accounting for more than a third of the private rented market.