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Good news for Buy to Let as Tenant demand continues to grow |
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Wednesday, 21 July 2010 08:37 |
Nearly three times as many landlords reported that tenant demand was rising rather than falling during the second quarter of the year, Paragon Mortgages' PRS Trends Report has revealed. The quarterly snapshot of the private rented sector and buy-to-let market shows that 29 per cent of landlords recorded growing levels of tenant demand during the period, compared to 10 per cent who said it was falling.
Both of these measurables increased compared to the first quarter of the year, when 24 per cent of landlords reported growing tenant demand and eight per cent reported falling levels of demand. Tenant demand was stable for the majority of landlords during the second quarter (54 per cent), whilst seven per cent said they were unsure which direction demand was heading.
Looking forward, landlords expect tenant demand to strengthen considerably. Over a third of landlords (35 per cent) expect demand to be higher in 12 months' time, with eight per cent forecasting a decline.
Nigel Terrington, Paragon Group chief executive, says: "Tenant demand has been rising consistently for two years and shows no signs of slowing down. Would-be home buyers continue to be unwilling or unable to step onto the property ladder, whilst longer-term social changes, such as greater numbers of single person households and economic migrants, are also creating more demand for rented property.
"Strong tenant demand is great news for landlords, but will lead to rental inflation for tenants unless the private rented sector is able to expand to meet this demand. Pressure is building on the finite number of properties in the sector because the lack of buy-to-let mortgage availability has prevented landlords from growing their property portfolios."
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