Tenant demand is easing but remains historically strong

Tenant demand across the private rented sector has eased slightly over the past year but remains strong by long-term standards.

The Landlord Trends data from Pegasus Insight shows that 68% of landlords still describe tenant demand in their area as strong.

That’s despite an 11 percentage point drop compared with a year earlier.

Of those surveyed, 30% said demand was very strong, while 38% described it as quite strong.

Only 5% reported weak demand.

Affordability playing a part

The firm’s managing director and founder, Mark Long, said: “This slight easing in perceived tenant demand doesn’t indicate any fundamental weakness in the rental market.

“Demand remains strong by historical standards, but we are starting to see a shift away from the exceptionally tight conditions of recent years.”

He added: “Affordability is now playing a bigger role in shaping behaviour on both sides of the market.

“Tenants are more cautious about moving, while landlords are balancing rising costs, regulation and the realities of what renters can afford.

“The result is a market that still has solid underlying demand, but one that is gradually becoming more measured and sustainable.”

Regional demand varies

The research found that regional variations persist, with landlords in the North East again recording the highest levels of demand.

The data shows that 71% of landlords there report strong interest, matching the previous quarter.

The East Midlands sits at the lower end of the scale, although 60% of landlords there still characterised demand as strong.

At the same time, voids have become more common with 44% of landlords experiencing an empty property at some point during the past 12 months.

Pegasus says that is an increase of 7% on the previous quarter.