We have constructed a multi-agent based model of an urban rental housing market in the short run. The dynamic disagregated model results in an endogeneous vacancy rate, a well known feature of real estate markets. The framework allows agent hetergeneity, of both tenants and landlords, to be easily incorporated. The vacancy rate results from the heterogeneity of residences, of potential tenants preferences and from the costly search required to find housing.

Tenants chose from a selection of the available houses the next house to visit and once visited decide whether or not to accept, no bargaining occcurs. Landlords fix rents to maximise income and are assumed to have knowledge of the market price and average time on the market. Rents do not change during a contractand tenants leave in a poisson process.

Sensitivity analysis of the steady state configuration has been carried out with respect to changes in the turnover of tenants and the heterogeneity of tenant's preferences. This model provides a solid basis for the examination of the price / vacancy rate relation in the long term through the addition of variations in the capacity.

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