Tenant demand hits all-time high – lender reports

Nearly seven out of 10 landlords reported an increase in tenant demand during the first quarter of the year – an all time high, research from Paragon Bank reveals.

A survey of nearly 700 landlords found that 67% experienced increased tenant demand during Q1, a new all-time high and up from 65% recorded during the final quarter of 2022, the previous record high.

More homes needed

Richard Rowntree, Paragon Bank Managing Director for Mortgages, says: “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.

“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.”

As part of the survey, landlords were asked to gauge tenant demand during the previous three months.

Significant increases were noted by 44% of respondents. This is up from 39% on the final quarter of last year and is also the highest proportion since research agency BVA BDRC began tracking the metric in 2011.

Rents up

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 – 85% of landlords said rents were currently rising in the areas where they let property, with over half (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%.