Recent research from Paragon Bank has shed light on the changing landscape of Britain’s rental market. Landlords situated in Outer London, as well as the East Midlands, have observed remarkable upticks in tenant demand.
A comprehensive study encompassing 983 landlords, undertaken by BVA BDRC, unveiled that 91% of property owners observed a hike in tenant demand in Outer London during this year’s second quarter. Among these, a significant 67% noted that the demand had considerably escalated. Not far behind, the East Midlands observed 86% of landlords witnessing rising demand, closely tailed by Wales at 82%.
However, the North East trailed as the region with the most sluggish rise in tenant demand. There, 69% of landlords noticed a surge, while a minor 6% remarked a decline during the same quarter.
Britain-wide, the second quarter maintained its momentum with 67% of landlords citing an upward shift in tenant demand, a figure consistent with the first quarter’s record high. The percentage of landlords reporting a decline dropped to a mere 2%, a decrease from the previous quarter’s 4%.
One pivotal finding from the survey was the ripple effect of this escalating demand on rental prices. A substantial 87% of landlords highlighted that rents were on the ascent in their respective markets. Furthermore, over half (51%) projected hikes in rental prices across their property portfolios in the upcoming half year.
When assessing rental price inflation across different regions, Welsh landlords led the pack with 94%. They were closely followed by their counterparts in the North East (92%), Yorkshire & Humber (91%), and the East Midlands (91%), all of whom recorded anticipated rent augmentations in their vicinity.
Paragon Bank Commercial Director of Mortgages Louisa Sedgwick said: “Tenant demand shows no signs of slowing down in many parts of the country. With supply not growing quickly enough to keep pace, we are seeing rental inflation and that is likely to continue until we see demand more in balance with supply.”
General inflation was cited as the main driver for increasing rents – 74% of landlords looking to increase rents in the next six months said the rising costs of running a property was the primary cause, followed by alignment with local market rents (59%).
