Almost 70% of landlords have reported an increase in tenant demand, according to the latest research by Paragon Bank.
A survey of nearly 700 landlords found that 67% experienced a flurry of tenant demand during Q1 2023, up from 65% in Q4 2022, the previous record high.
The highest levels were experienced by those operating in the East of England, with nine in 10 recording an increase, while the lowest was seen by the 73% of West Midlands-based landlords.
When asked about current levels of tenant demand, 94% of landlords in the South West said they were experiencing ‘strong’ or ‘very strong ‘demand for their properties.
Over 90% of landlords in Wales, West Midlands and the South East said demand was currently at positive levels.
Only 4% of landlords experienced a drop in tenant demand.
In addition, 85% of landlords said rents were currently rising in the areas where they let property, with over half (52%) planning to up rents across their own portfolio over the next six months.
Of those looking to hike rents, the average planned increase was 8.2%.
The most common reason to up rents was to cover the increased cost of running a property (73%), along with aligning with local market rates (60%).
Growing mortgage finance costs was cited by 49% of those planning to raise rents.
“The fact that we’ve seen another high in the proportion of landlords who have told us that they’ve experienced an increase in tenant demand reinforces what I’ve said previously; put simply, we need more private rented sector homes, not less,” said Richard Rowntree, managing director for mortgages at Paragon Bank.
“An important element of this is policy that strikes the right balance between driving up standards and providing tenants with protection while not acting as a barrier to investment.
“Failure to address this will further drive rental inflation and increase competition for rented homes at a time when affordable housing is as important as ever.”
