Shortage of homes to rent sees tenant demand remaining high

Shortage of homes to rent sees tenant demand remaining high

0:03 AM, 6th February 2024, About 5 months ago 1

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Tenant demand for rental properties remained high in the last quarter of 2023, a survey by Paragon Bank reveals.

The survey found that 63% of landlords saw an increase in tenant demand for their properties in the final three months of last year, with 37% reporting a significant increase and 26% a slight increase.

Just 4% of landlords reported a decrease in tenant demand, while 16% said it remained unchanged.

‘There remains a chronic supply demand imbalance’

Paragon’s managing director of mortgages, Richard Rowntree, said: “Although tenant demand has come off its record highs, there remains a chronic supply demand imbalance across large parts of the country.

“Although it’s a complex issue with many factors at play, the supply and demand dynamic dictates that we pay more for goods and services that are in high demand and short supply.”

He added: “It is unsurprising then to see that the landlords in the regions seeing the most demand are amongst the most likely to see rents rising.

“This illustrates how a healthy, sufficiently supplied PRS is needed to maintain rent levels that are affordable for the millions of people that live in rented homes.”

Regional variations in tenant demand

The survey also showed regional variations in tenant demand and rent increases with the North West having the highest proportion of landlords (75%) reporting increased tenant demand.

Next was Yorkshire & The Humber (74%) and then the East Midlands (71%).

These regions also had the highest rates of rent increases, led by landlords in the East Midlands (89%), the North West (88%) and Yorkshire and The Humber (87% ).

This contrasts with regions including the South West (81%) and Outer London (79%), where rent increases were less common.

The survey also found that 51% of landlords say they will increase rents in the next six months, mainly due to the rising cost of running a rental home (70%).

Other reasons for planned rent increases include matching market rents (62%) and higher mortgage costs (40%), although this has dropped by eight percentage points compared to the previous quarter.


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Comments

JB

11:38 AM, 6th February 2024, About 5 months ago

Most sensible landlords are getting their rents as high as the market will stand in anticipation of an incoming labour government

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