Sky high tenant demand

Tenant demand for rental properties is at its highest rate ever, with almost a third of landlords stating that demand is growing or booming, according to a recent survey of landlords by Paragon Group.

This is an 8% increase from last quarter in the proportion of landlords who report that demand is on the up.

A further three in five landlords believe that demand remains stable.

John Heron, Managing Director of Paragon Mortgages said: “Demand for rental properties certainly shows no signs of declining. Tenant demand is fueled by social and demographic factors, in particular the number of students, young professionals and immigrants that live in rented accommodation.”

The recent rise in interest rates will prove to be a further catalyst. As borrowing costs rise, people will find it more difficult to afford mortgages - potential first-time buyers may be forced to postpone getting on the property ladder. With many commentators predicting rates will increase further, there will be yet more people choosing to rent property rather than buy.

Confidence among landlords about demand for rental properties is at its all time highest level and the average void period is down this quarter to three weeks a year, which with increasing demand is likely to continue to fall.

John Heron concluded: “In all, we can expect a busy year for landlords - with a rapidly increasing number of households in the UK and a long term shortage of homes, demand for housing looks set to continue rising and buy-to-let can only benefit.”