The lack of rental stock has translated into higher prices, which on average were at £1,652 at the end of 2022, according to new research from TwentyEA.

Data found that this was an increase of £200 since 2021 and almost £300 since 2019.

New instructions were down by 7.8% compared to 2021 and by more than 25% since 2019.

TwentyEA says this is being driven mainly by landlords withdrawing from the market as tax, regulatory and cost environments have become less favourable.

Lack of supply has also compounded on the demand side, as tenants are deferring decisions to buy as a result of high house prices, inflation and interest rates.

The research showed that the pressure on London, Manchester and Edinburgh in terms of supply is “abundantly clear” in significantly reduced lets agreed last year compared to 2021.

Elsewhere numbers were “generally flat” with Peterborough and the South West being outliers, where TwentyEA says there was some modest growth.

TwentyEA strategic solutions director Stuart Ducker says: “This trend is likely to continue as higher interest rates and inflation may be passed on by landlords whilst supply constraints and demand pressures continue to apply.”

“Our research shows that the lack of rental properties available in the market in 2022 in comparison with 2021. Aside from Inner London, all regions sit between 1.5 and three months stock. The situation has deteriorated considerably in London, Scotland and Northern Ireland.”

“Any major improvement in rental stock availability remains in question with interest rates rising, a squeeze on availability of mortgage particularly buy-to-let and the fiscal and legislative changes from prior to the pandemic that is less enticing for landlords.”