Landlords with property in outer London and the East Midlands are reporting the strongest levels of tenant demand in Britain, according to Paragon Bank data.
The research of 983 landlords, carried out by BVA BDRC, showed 91% of landlords reported rising tenant demand in outer London during Q2 2023, with 67% reporting demand grew ‘significantly’.
In the East Midlands, 86% of landlords reported rising tenant demand, followed by Wales at 82%.
The weakest region for tenant demand was the North East, with 69% of landlords recording an increase in demand and 6% stating that demand fell during the quarter.
Overall, 67% of landlords across Britain reported increasing levels of tenant demand during Q2, unchanged from Q1 and an equal record high.
Only 2% of landlords reported falling levels of demand, down from 4% last quarter.
The survey highlighted that this strong demand was leading to rent increases, with 87% of landlords admitting rental prices were increasing in their local market, and 51% stating they planned to increase rents across their own portfolios within the next six months.
Landlords with properties in Wales (94%), the North East (92%), Yorkshire and Humber (91%) and East Midlands (91%), were most likely to see rent increases in their local market.
General inflation was cited as the main driver for increasing rents — 74% of the landlords looking to increase rents in the next six months said the rising costs of running a property was the primary cause, followed by alignment with local market rents (59%).
Louisa Sedgwick, commercial director at Paragon, commented: “Tenant demand shows no signs of slowing down in many parts of the country.
“With supply not growing quickly enough to keep pace, we are seeing rental inflation and that is likely to continue until we see demand more in balance with supply.”
