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Rental demand at all time high, says Paragon

Research from Paragon Mortgages reveals that landlords believe tenant demand for rental properties is at its highest rate ever.

Almost a third of landlords surveyed stated that demand for rental property is growing or booming.

This is an 8% increase from last quarter in the proportion of landlords who report that demand is on the up.

A further three in five landlords believe that demand remains stable.

John Heron, managing director of Paragon Mortgages, says: Demand for rental properties certainly shows no signs of declining.

Tenant demand is fuelled by social and demographic factors, in particular the number of students, young professionals and immigrants that live in rented accommodation.

Paragon says that the recent rise in interest rates will prove to be a further catalyst.

As borrowing costs rise, it believes people will find it more difficult to afford mortgages and potential first-time buyers may be forced to postpone getting on the property ladder.

With many commentators predicting rates will increase further, Paragon says there will be yet more people choosing to rent property rather than buy.

As well as showing that confidence among landlords about demand for rental properties is at its all time highest level, the survey also reveals that the average void period is down this quarter to three weeks a year.

If rental demand increases this is likely to continue to fall.

Heron says: In all, we can expect a busy year for landlords – with a rapidly increasing number of households in the UK and a long term shortage of homes, demand for housing looks set to continue rising and buy-to-let can only benefit.

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