Tenant demand reported by landlords has reached an all-time, research conducted on behalf of Paragon Bank has found.
A survey of nearly 700 landlords found that 67% experienced increased tenant demand during the first quarter of the year, a new all-time high and up from 65% recorded during the final quarter of 2022, the previous record high.
As part of the survey, landlords were asked to gauge tenant demand during the previous three months. Significant increases were noted by 44% of respondents. This is up from 39% on the final quarter of last year and is also the highest proportion since research agency BVA BDRC began tracking the metric in 2011. A further 23% of landlords indicated that tenant demand had increased slightly, 15% had seen no change, while just 4% experienced a decrease.
In response to rising demand, rents have also increased – 85% of landlords said rents were currently rising in the areas where they let property, with over half (52%) planning to increase rents across their own portfolio in the next six months. Of those looking to increase rents, the average planned increase was 8.2%.
Covering the increased cost of running a property was the most common reason given by those planning to increase rents (73%), along with aligning with local market rates (60%). Increased mortgage finance costs was cited by 49% of those planning to raise rents.