March 01, 2011
Demand for rented property hit a two-year high as 2010 came to a close, according to a recent survey of UK landlords.
Paragon Group's Private Rented Sector (PRS) quarterly snapshot of developments in the PRS and buy-to-let market showed the proportion of landlords reporting growing levels of tenant demand was at its highest level since the final quarter of 2008.
A recent survey of thousands of landlord across the UK found that 40% of landlords said tenant demand grew during the quarter, compared to 36% during the third quarter.
The proportion of landlords reporting growing levels of tenant demand has now risen for six consecutive quarters, which has coincided with a shortage of mortgage finance in the owner-occupied mortgage sector.
Just 4% of landlords said tenant demand fell during the quarter, the lowest proportion since the third quarter of 2008 and the second lowest level since Paragon started collating the data in 2004.
"Tenant demand shows no signs of slowing down and in some busy markets, such as London, there is anecdotal evidence of sealed bids being used for certain properties. This will become more commonplace across the UK unless the PRS is able to expand to meet higher levels of demand,” said Paragon Group Chief Executive, Nigel Terrington.
“Four out of 10 landlords say that tenant demand grew during the period, which is a significant number and has major implications for renting in the UK if the issue of rental property supply cannot be addressed."
And in addition to the increasing tenant demand, 19% of landlords said that mortgage finance was either widely or reasonably available in the final quarter of 2010, up from 17% on the previous three months.
Nigel Terrington adds: "The prospects for landlords are strong. Tenant demand continues to strengthen, yields are healthy and stable and confidence is high. The housing market is presenting some strong buying opportunities and landlords are well placed to take advantage.
Importantly for those hoping to build a property portfolio in the current market, landlord confidence remained healthy during the close of 2010, with 17% of landlords saying they were more optimistic regarding the performance of their property portfolio.
