Tenant demand is soaring in the UK – Paragon

Tenant demand across the UK’s private rented sector (PRS) is soaring but there’s a huge imbalance between supply and demand, a survey reveals.

According to Paragon Bank, there are very few landlords experiencing weak interest currently.

Nearly 800 landlords were questioned and a staggering 83% of them reported strong tenant demand in the first quarter of 2024.

This figure breaks down to 43% of landlords experiencing ‘very strong’ demand and a further 40% reporting it as ‘quite strong’.

Just 1% of landlords noted weak demand, highlighting the competitive rental market.

Investment in rented homes is still needed

Paragon’s managing director, Richard Rowntree, said: “Although recent reports have pointed to an improvement in stock levels within the private rented sector, this research is evidence that investment in rented homes is still very much needed as demand still outweighs supply.

“Making more homes available for tenants provides them with greater choice and is one of the most effective ways of keeping rental inflation at affordable levels.”

‘We can only see tenant demand levels growing’

He added: “We can only see tenant demand levels growing, fuelled by forecast population growth and household formation over the next decade.

“Rental housing supply needs to keep pace to ensure those who want or need to rent a home have a choice of property at a reasonable price.”

The bank’s research also identified regional variations in tenant demand with the South West and North East reporting the highest concentration of landlords with very strong demand – exceeding 50% in both areas.

Yorkshire and the Humber saw the lowest levels with 49% of landlords stating it was quite strong and 31% very strong.