Void periods follow favourable trend as tenant demand soars

Void periods on private rented properties (the average number of weeks that they remain empty in a year) have been falling steadily for the last nine months, according to the latest research by Paragon Mortgages.

The annual average time for which a private rented property stands vacant has hit its lowest level in over a year – at 2.8% - underpinned by strong tenant demand.

Voids have remained broadly stable between 2.6 and 3.0 weeks for the majority of the last four years. But, having hit a high at the end of 2006, they have steadily declined over the first half of this year.

Rising numbers of students, immigrants and single person households are all underpinning the long-term growth of tenant demand and the buy-to-let market. However, the recent rises in the cost of borrowing further stretched affordability for first time buyers since last summer, creating downward pressure on void periods on rented properties.

John Heron, managing director of Paragon Mortgages explained: “Many people live in private rented accommodation out of lifestyle choice because it gives them flexibility and convenience until they settle down. But private rented property also offers young people an affordable alternative to home purchase, until such a time as they are able to afford a mortgage. As interest rates have increased, many young people have chosen to stay in rented accommodation for longer. With interest rates almost certain to go up again this week and repayments as a proportion of FTB income at a 15 year high, we can expect more young people to hold off purchasing their own properties for longer. Affordability constraints for first time buyers have become greater and the private rented sector provides an affordable and flexible alternative for people until they are able to purchase a home.”