Tenant demand continued to climb during the third quarter of the year, research by specialist buy-to-let lender Paragon shows.
Its Private Rented Sector Trends Report for the third quarter gives a detailed overview of the sector and landlords’ views on performance.
More than four out of ten landlords (44%) said tenant demand increased during the third quarter and just 4% thought it declined.
When asked for their forecast of tenant demand for the next 12 months, almost half of landlords (49%) said they expect it to continue to increase.
Rental income remained healthy for a third consecutive quarter with 34% of landlords reporting an increase and only 4% saying it had decreased. Of those landlords who achieved an increase in Q3, 11% said it was between 2% and 4%.
The report also reveals a shift in the types of properties that landlords are looking to purchase. Terrace houses were the most popular choice at 41% followed by flats (35%) and then bungalows – which have surged in popularity from 2.7% in Q2 to 10% in Q3.
Nigel Terrington, chief executive of Paragon, said: “Tenant demand has continued to increase for a third quarter, which is perhaps not surprising considering the current squeeze on the UK housing market as a whole.
“More people than ever before are relying on the private rented sector, so it is positive to see that landlords are looking to invest in their portfolios and are also diversifying the types of property in which they are investing in order to meet tenant demand.”
Paragon’s PRS Trends Report for Q3, from July 1 to September 30, also shows:
Yields dropped only very slightly from 6.2% in Q2 to 6.1% in Q3
Average portfolio value increased from £1.42m in Q2 to £1.48m in Q3
Continued improvement in the perception of availability of buy-to-let finance, with 27% of landlords saying they thought it was at least reasonably available
Average void period for Q3 was 2.8 weeks
One in ten landlords are currently using social media channels for business purposes, mainly Twitter and Facebook, to advertise vacant properties for rent