In a survey of 140 landlords, three in ten said that it took them less than a week to find tenants, whilst a further 40% said it took them between one and two weeks.
The proportion of landlords saying it took more than two weeks has fallen sharply from last quarter, from 42% to 28% - leaving the average time it takes landlords to find tenants at 13 days, down from 16 last quarter.
The private rented sector has long been the tenure of choice for growing demographics such as students and immigrants. But it also offers a temporary accommodation solution to a steady flow of young professionals who are increasingly burdened with student debt and unable to afford home purchase in the short term.
As affordability for would be buyers has declined, and more recently the outlook for the housing market has become uncertain, many of these potential purchasers have delayed taking their first step onto the ladder, choosing instead to remain in rented accommodation. This is causing the number of people who are competing for tenancies to grow, and has put upward pressure on rents – which, according to the Paragon Buy-to-Let Index, have risen 6% over the past quarter and 17% over the past year.
John Heron, Mortgage Trust managing director, commented: "Much has been made recently of the problems investors have finding tenants for new build flats - and this has frequently been interpreted as being symptomatic of a decline in tenant demand for private rented property generally. But speculative gambling on properties with no proven appeal to tenants is not representative of the buy-to-let market. The vast majority of professional landlords know their local area well and have a good understanding of the level of appetite for rental properties within it – they invest wisely and make good returns.
"All our research, and indeed research from other bodies such as RICS, shows that there is very strong tenant demand for the right properties – particularly family homes and terraced houses. Reports that landlords are selling off properties are also wide of the mark. In fact tenant demand remains strong and void periods are low and getting lower. With property prices moderating, I expect yields to rise over 2008 – this is a good environment for the professional landlord to expand his portfolio."
