Tenant demand has increased for the first time in two years, with almost two-thirds of landlords reporting strong demand for rental homes in their local area, according to the latest Landlord Trends research from Pegasus Insight.

The Q2 2026 survey found that 63% of landlords described tenant demand as either very strong or quite strong, up from 58% in the previous quarter. It is the first quarterly increase since Q1 2024, following a steady decline over the intervening two years.

Mark Long, founder and director of Pegasus Insight, said: “Tenant demand has been gradually normalising from the exceptional levels recorded in 2024, so a five percentage point rise this quarter suggests that the need for rental accommodation remains considerable.

“It is particularly notable that the increase is being driven by landlords reporting very strong demand. Almost three in ten now fall into this category, while just 5% describe demand as weak.”

The proportion of landlords reporting very strong demand rose by seven percentage points to 29%, while a further 34% described demand as quite strong. Just 5% said demand was weak.

The recovery follows a longer decline from 83% of landlords reporting strong demand in Q1 2024. The figure fell to a low of 58% in Q1 2026 before recovering in the latest quarter.