Estate agents across the region say rental properties are coming back onto the market and easing supply, and there remains a strong appetite from potential tenants.
But concerns have been raised the cost-of-living crisis plus rising interest rates does have the potential to lead to landlords selling up as they get nervous or might need further income over the winter.
With so much economic and political uncertainty around, they also say the future of the market is almost impossible to predict.
Nationally, listings have been down and inquiries up, meaning that a rising number of renters have been fighting over a dwindling supply of homes. Experts say the situation has been exacerbated by rising mortgage rates.
Financial distress is also now higher than during the pandemic. Rising inflation, energy and food prices in particular mean that landlords are concerned about the impact this will have on their tenants and on their rent payments.
In September, asking rents for new lets went up in every single part of the UK, according to the HomeLet Rental Index.
Russell Griffin, co-director of Samuel Wood Estate Agent in Shropshire and Midlands regional executive on the Propertymark Board, said: "Most agents across the UK are reporting reasonable levels of activity in sales and completions, together with very strong demand in the private rental sector.
“There have been less incentives to encourage investment in the private rental sector (PRS) lately, so the general supply of rental stock has slipped in recent years, which means there haven’t been enough rental homes when large shifts like this occur. This has resulted in unusually high rent inflation – up to 12.3 per cent in quarter three of 2022.
"But I can report and so have my Propertymark colleagues nationally, that properties are finally coming back onto the market and easing supply.
"The cost-of-living crisis plus rising interest rates does have the potential to drive another round of property sell-offs as people get nervous or might need further income over the winter.
"When landlords come to renew their mortgages, they might not be offered such a good deal as before the current financial storm, as we have seen that lenders have become nervous too.
"But there are still hundreds of people and families wanting to rent and some home buyers also actively choose to rent after selling their own home, so they can be ready to move quickly when the right property arises, so the demand for rental properties is still very much out there."
Mr Griffin said due to planned changes to the legislation surrounding EPC ratings in the coming years, some landlords are deciding to sell at what they consider to be 'the top of the market'.
"This creates a ‘welcome break’ for those renters who need help getting on the property ladder and on the flip side, it’s actually a good time to invest if you can secure a deal and find the right property for longer-term investment as we are seeing families wanting to rent long-term.
"This means a steady income, no matter what any predictions may be to house prices. It means that people who want to get a property to invest can get a foothold ahead of property developers and landlords with multiple properties," he added.
Andrew Roberts, director of Berriman Eaton estate agents in Tettenhall, said: "The current rental market is strong and there's a lot of people out there looking to rent as it affords them flexibility in terms of lifestyle choices such as where they live and in terms of employment.
"The only reason landlords might be withdrawing at the moment is due to ever-changing legislation.
"We don't have a crystal ball and it is too early to comment on the impacts of interest rate rises. We'll have a better idea after the winter has been and gone and things become clearer with energy price rises.
"I expect the rental market to remain strong next year and that is based on elements beyond the economy but more the lifestyle choices of people."
The latest Rental Demand Index by estate and lettings agent, Barrows and Forrester, has revealed that tenant demand has started to rise across England’s rental market, with demand up by as much as 15 per cent in some parts of the country.
The latest index shows that rental demand across England is currently sitting at 46 per cent, having seen good quarterly growth of seven per cent between the second and third quarters of this year. The West Midlands has seen growth of 11 per cent.
The largest quarterly declines have been reported in the Isle of Wight, Cornwall, Dorset and Shropshire.
James Forrester, managing director of Barrows and Forrester, said: “Demand for rental properties has continued to return to the market following a tough pandemic period, which touch wood, seems well and truly behind us now. More and more of us are returning to work or higher education in new locations, which has helped bolster the number of tenants looking for accommodation.
"Of course, there remains a shortage of homes to meet this demand, largely due to the government’s campaign against the buy-to-let sector and you’d need only look at the issues facing many students in securing term time accommodation to see more needs to be done.
"The demand for rental homes is only likely to grow stronger over the coming months, as the current economic landscape forces many to remain renting having been priced out of owning their own home.”
Meanwhile, research from Ocasa, the specialist rental platform, has revealed where the increasing cost of renting is putting a squeeze on rental market affordability for the nation’s tenants when it comes to the change in the percentage of income required to cover the average monthly rent.
The research shows that currently, the average tenant in England is paying £926 in rent, requiring 35 per cent of the average gross salary of £2,671.
This is a four per cent increase when compared to 2012, when 31 per cent of income was required to cover the cost of renting.
In the West Midlands, the average tenant is paying £726 in rent, requiring 29 per cent of the average gross salary of £2,473.
This is a two per cent increase when compared to 2012, when 27 per cent of income was required to cover the cost of renting.
Jack Godby, sales and marketing director at Ocasa, said: “We’re now more reliant than ever on the rental market, as many tenants remain firmly priced out of buying their own home, while many more prefer the greater flexibility it provides. As a result, demand has grown consistently over the last decade and this has helped drive the cost of renting up substantially.
"At the same time, earnings have increased, but they’ve failed to keep pace, which means that we’re now paying a larger proportion of our pay cheque simply to put a rental roof over our heads.
"This imbalance needs to be seriously addressed as there’s certainly no sign of demand for suitable rental homes dropping over the coming years, but there is a limit to how much a tenant can pay before this cost simply isn’t sustainable.”
Looking at the housing market in general, the latest RICS UK Residential Market Survey found it lost further momentum in September.
The outlook for interest rates and an uncertain macro picture have taken a further toll, with the expected rise in mortgage rates over the coming six months anticipated to outweigh any potential boost from the cut to Stamp Duty.
Alistair Hilton, head of sales at Shropshire estate agents Balfours, said: "The surest thing about today’s property market in Shropshire, like all markets in the UK and across the globe is that nothing is certain.
"Currently there is a shortage, both of residential property for sale and to rent. It will be the stabilisation or volatility of UK interest rates which will influence property prices, thereby the trend of those continuing to rent, or switching to buy.
"It would be true to say fear of the unknown, what might happen, is tightening its grip as winter approaches and none of us have a crystal ball."
Nick Berriman, director of Berriman Eaton estate agents, added: "The hiatus caused by the mini budget has just made us reassess our predictions.
"My expectations are that if the new Chancellor and Government team can bring stability back, then the market will be fine and I don't see any reason why there wouldn't be price growth and a healthy market. It just depends on how quickly and by how much that stability can be restored."