Eight in 10 landlords are reporting strong levels of tenant demand, Paragon Bank research has revealed.
In its poll of nearly 800 landlords who were asked about their lets during the first quarter of the year, 43% said that tenant demand was ‘very strong’, while a further 40% said it was ‘quite strong’. Only 1% of landlords noted ‘weak’ tenant demand, while 12% reported it to be ‘average’.
The research, by research agency Pegasus Insight, also uncovered regional differences in demand across England and Wales. Those landlords in the South West experienced strongest tenant demand, with 54% reporting that it was very strong and 30% said it was quite strong. Similar levels of demand were recorded in the North East, where 51% reported it to be very strong and 36% said it was strong.
Yorkshire and The Humber was deemed to have the lowest levels of demand after 49% of landlords stated it was quite strong and 31% very strong.
Richard Rowntree, managing director for mortgages (pictured right), says although recent reports have pointed to an improvement in stock levels within the private rented sector, this research is evidence that investment in rented homes is still very much needed as demand still outweighs supply. “Making more homes available for tenants provides them with greater choice and is one of the most effective ways of keeping rental inflation at affordable levels,” he adds.
“We can only see tenant demand levels growing, fuelled by forecast population growth and household formation over the next decade. Rental housing supply needs to keep pace to ensure those who want or need to rent a home have a choice of property at a reasonable price.”
Paragon’s previous research found that average rental yields have hit a six-year high with HMOs and properties in the North East offering landlords the best returns. Yorkshire & The Humber landlords enjoyed high yields of 6.6% while those in the capital recorded the lowest yields, with returns of between 5.2%-5.7%.
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