Unprecedented demand for rental properties
Landlords are witnessing a surge in tenant demand, reaching an unprecedented high of 62 percent, according to recent research commissioned by Paragon Bank. This marks a significant uptick from previous years, with tenant demand soaring to its highest level since 2011 when tracking began.
Throughout the challenging landscape of the Covid-19 pandemic, the trend of increasing demand for privately rented homes has remained steadfast, as indicated by first-quarter figures for 2022. Compared to the same period a year ago, the proportion of landlords reporting rising tenant demand has doubled, and nearly quadrupled from Q1 2020, where only 16 percent of landlords noted such growth.
In a survey involving over 700 landlords, conducted to assess tenant demand over the previous three months, more than a third of respondents observed a “significant increase,” while an additional 28 percent reported slight upticks. Conversely, a mere three percent of landlords reported decreases in tenant demand, marking the lowest recorded level.
Regionally, Central London stands out with an impressive resurgence in its rental market, with 84 percent of landlords operating within the inner capital reporting increased tenant demand—a substantial rise from the 12 percent reported in Q1 2021. Central London joins the ranks of the South West and Wales as regions experiencing the highest levels of growing tenant demand.
Moray Hulme, mortgage sales director for Paragon Bank, underscores the importance of addressing the growing demand for rental properties. He highlights concerns about landlords exiting the market due to escalating tax and regulatory requirements, which can hinder the supply of rental homes. While acknowledging the necessity of appropriate taxation and regulation to maintain industry standards, Hulme emphasizes the importance of ensuring that the buy-to-let sector remains attractive to investors, who play a crucial role in meeting housing demand.
In light of these findings, it’s evident that the rental market continues to evolve, presenting both challenges and opportunities for landlords and tenants alike.
