Tenant demand hits record high amid rising rents

Tenant demand hits record high amid rising rents

0:01 AM, 15th November 2023, About 6 months ago

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Tenant demand in the UK reached a record high in the third quarter of the year, with more than seven in 10 landlords reporting an increase, a survey reveals.

The research from Paragon Bank found that 71% of landlords saw rising levels of tenant demand in Q3, up from the previous record of 67% in Q2.

This is the highest figure recorded in the 12-year history of the survey – just 3% of landlords reported a fall in tenant demand.

‘We saw record levels of tenant demand’

Paragon’s managing director, Richard Rowntree, said: “During the first two quarters of the year we saw record levels of tenant demand reported by landlords.

“For this to be surpassed in Q3 highlights how the imbalance between the supply of rented homes and demand from renters is not improving.

“This reduces choice and increases competition for renters, while fuelling rental inflation, a scenario that often impacts the most vulnerable to the greatest degree.”

He added: “With social housing unable to meet this demand and home ownership aspirations hindered by cost-of-living pressures, further investment in the PRS cannot be delayed.”

Strongest tenant demand was seen in the West Midlands

The strongest tenant demand was seen in the West Midlands, where 76% of landlords reported an increase, followed by Wales (75%), the South East (74%) and East Midlands (73%).

The lowest demand was in the North East (65%) and the East of England (61%).

The survey also shows that rents increased in line with tenant demand, with 87% of landlords identifying this as a current trend in their areas, unchanged from Q2.

Raised rents across their own portfolio

Seven in 10 landlords (70%) said that they had raised rents across their own portfolio in the last 12 months, up from 65% in Q2.

More than half (54%) of landlords planned to increase rents in the next six months, up by three percentage points from Q2. The average rent increase expected was 8.4%.

The main reasons for increasing rents were covering the higher cost of running a property (66%), aligning with local market rents (63%) and covering increased mortgage finance costs (48%).


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