Paragon Mortgages Trends research reveals that just over half of landlords (51%) stated that tenant demand was either growing or booming during the third quarter of 2008. This is the highest level since Paragon first included the question in the panel-based Trends survey in 2004.
It is also double the number of landlords that were experiencing growing or booming tenant demand during the same period in 2006 and up from the 33.9% recorded when the same question was asked in the second quarter of 2008.
According to the survey, 41.7% of landlords stated that tenant demand is currently stable, with just 3.6% of respondents reporting a declining level of tenant demand.
When questioned about how landlords expect tenant demand to change over the next 12 months, 57.8% of respondents said it would grow from its current level. This is up from 53.9% from the second quarter and 38.5% recorded when the question was first introduced to the Trends survey in the fourth quarter 2007. A third of landlords (32.3%) expected tenant demand to stabilise over the next 12 months, with 5.2% stating it would fall from its current levels.
This high level of tenant demand is reflected in a further decline in the average void period experienced by landlords, which currently stands at 2.6 weeks per year, down from 2.7 weeks when the same question was asked in the second quarter. Void periods have been in decline since the third quarter of 2006 when they peaked at 3.1 weeks.
John Heron, Paragon Mortgages managing director, said: ‘We are now over a year into the credit crunch and landlords continue to see growing levels of tenant demand, and this doesn’t look like tailing off over the coming months.
‘The private rented sector is playing an important role in providing housing for those people that can’t or aren’t prepared to get on the housing ladder. We have seen that the supply of rented properties has increased as people that would have sold their home decide it rent it out instead, but where do those people then go on and live? In most cases, in rented property.
‘It’s important that the PRS’s role in the housing mix is recognised by Government and that landlords aren’t put off from investing in property through over regulation.’
