67% of landlords experienced increased tenant demand in Q1
Tenant demand reported by landlords has hit an all-time high, according to research conducted on behalf of Paragon Bank.
A survey of nearly 700 landlords found that 67% experienced increased tenant demand during the first quarter of the year – a new all-time high, edging the previous quarter’s 65%.
Research agency BVA BDRC asked landlords to gauge tenant demand during the previous three months, and significant increases were noted by 44% of the respondents – up from 39% on the final quarter of last year. A further 23% of landlords indicated that tenant demand had increased slightly, 15% had seen no change, while just 4% experienced a decrease.
In response to rising demand, rents have also increased, with 85% of landlords saying rents were currently rising in the areas where they let property, and over half, or 52%, planning to increase rents across their own portfolio in the next six months. Of those looking to increase rents, the average planned increase was 8.2%.
Covering the increased cost of running a property was the most common reason given by those planning to increase rents at 73%, along with aligning with local market rates with 60%. Increased 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,” Richard Rowntree (pictured), managing director for mortgages at Paragon Bank, said.
“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.”
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