In a survey of 200 landlords, 27 per cent said that tenant demand is currently either booming or growing, with 66 per cent describing it as stable.
However, when asked about the outlook for 2008, 42 per cent of respondents said they believe that tenant demand will either boom or grow over the next 12 months, with 52 per cent believing it will remain stable.
This surge in confidence can be attributed to the current instability within the home-buying industry forcing people to stay in rented accommodation longer as tightening criteria and affordability constraints hamper their efforts to get onto the property ladder.
Investors remain committed to their portfolios, contrary to the suggestion that landlords will begin to sell in 2008.
The average portfolio currently comprises 11 properties worth £1.46 million, and landlords expect the value of their portfolio to rise by an average of 1.6 per cent over the coming year and to modestly grow the size of their portfolios in 2008.
John Heron, Paragon Mortgages’ managing director believes there will be "significant opportunities" for landlords going forth into 2008.
"Demand for rented accommodation will accelerate as homebuyers delay property buying decisions, and inward migration and other demographic factors place continued pressure on the housing stock," said Heron.
“Landlords are dispassionate purchasers and are well placed to secure good deals on properties, helping to increase the supply of rented homes and meet demand from tenants. That is the key driver of the buy-to-let market – customer need.
"Successful landlords only purchase properties for which they know there will be strong demand from tenants, who typically prefer terraced houses and flats in established areas. From landlords’ responses, it is clear they remain upbeat about prospects for the private rented sector over the coming year.”
