estate agent window tenant demand house prices

Tenant demand hits an all-time high and rents set to rise in 2024

The private rented sector continues to be inundated with high tenant demand, and the latest forecasts show this will push up prices further next year.

The much-reported supply and demand imbalance in the UK’s private rented sector is showing no signs of easing, meaning huge numbers of landlords are still experiencing unprecedented appetite for their rental homes when they are listed. In such a market, this is inevitably pushing up rental prices.

According to Paragon Bank, tenant demand has now reached record levels, with 71% of surveyed landlords stating that they have seen an uplift in tenant demand in the third quarter of this year. This compares with 67% who said the same in the second quarter.

These findings also serve to demonstrate how crucial rental property is in the housing market right now. With mortgage rates remaining high, many would-be first-time buyers are putting off purchasing a property, and instead renting for longer. Greater numbers of tenants are also opting to renew existing tenancies.

Paragon’s findings reveal a record high since the research was first conducted by BVA BDRC 12 years ago.

The research shows that 76% of landlords in the West Midlands reported a stronger tenant demand in Q3, putting it at the top of the list in terms of need for rental property. This was followed by Wales with 75% of landlords reporting the same, then South East (74%) and East Midlands (73%).

The link between tenant demand and prices

A huge 87% of landlords in Paragon’s survey said they had noted rents rising in the area in which they operate, while 70% said they themselves have upped their rents within the last 12 months. In Q2, 65% of landlords said they had raised their prices.

Further to this, more than half (54%) intend to increase their rents on their properties in the next six months (compared with 51% last quarter), and the hikes are expected to be an average of 8.4% for tenants.

While higher tenant demand is certainly pushing up prices, in many cases causing pricing wars among some prospective tenants, 66% of landlords said they were increasing them because of higher running costs. Almost half (48%) planned to hike their rents to cover higher mortgage costs.

Richard Rowntree, managing director for Mortgages for Paragon Bank, urges greater investment in the buy-to-let sector.

“During the first two quarters of the year we saw record levels of tenant demand reported by landlords,” he said.

“For this to be surpassed in Q3 highlights how the imbalance between the supply of rented homes and demand from renters is not improving. This reduces choice and increases competition for renters, while fuelling rental inflation, a scenario that often impacts the most vulnerable to the greatest degree.

“With social housing unable to meet this demand and home ownership aspirations hindered by cost-of-living pressures, further investment in the PRS cannot be delayed.”

Big rises in 2024

For property investors, rental growth is boosting yields as well as helping to offset the rising costs of borrowing and other essential outgoings for landlords. Keeping an eye on current as well as forecast rental prices in your area is important to ensure your property investment will be successful in the long term.

New research published by JLL has set out its expectations for the rental market in the coming years, linked to factors such as tenant demand and low supply, as well as other situations affecting the sector, and it predicts that current rental growth trends will continue.

According to its report, the supply of rental homes has fallen short of tenant demand by approximately 1.5 million homes since the mid-2000s. It believes that between now and 2028, the cumulative shortfall will be 720,000 in the private rented sector.

Therefore, it expects UK rents to increase by a cumulative 22.80% between 2024 and 2028, with next year to see the biggest increase of 5%. This will be followed by 4.5% in 2025, 4% in 2026, 4% in 2027 and 3.5% in 2028.

Its report notes: “Looking ahead, over the next five years, the lack of new rental stock, the result of fewer new home completions and a more challenging interest rate environment, will likely lead to rental growth surpassing wage growth.

“We forecast a 5% increase in rents across the UK in 2024. From 2025 onwards, we anticipate that more attractive mortgage rates will prompt more tenants to transition into homeownership, and this shift will bring about a better equilibrium between tenant demand and available rental stock.”

Self-certified Sophisticated Investor

Please read

I declare that I am a self-certified sophisticated investor for the purposes of the restriction on promotion of non-mainstream pooled investments. I understand that this means:

I am a self-certified sophisticated investor because at least one of the following applies:

I accept that the investments to which the promotions will relate may expose me to a significant risk of losing all of the money or other property invested. I am aware that it is open to me seek advice from someone who specialises in advising on non-mainstream pooled investments.

High Net Worth Investor

Please read

I make this statement so that I can receive promotional communications which are exempt from the restriction on promotion of non-mainstream pooled investments. The exemption relates to certified high net worth investors and I declare that I qualify as such because at least one of the following applies to me:


Sign up for first access to new developments and exclusive property investment opportunities.

We send limited and targeted emails on new launches and exclusive deals which best fit your areas. We are trusted by over 30,000 active buyers as their source for new stock.

  • New property developments
  • Professional market reports
  • Property deal alerts
  • Development updates
Manchester property investment


Receive trending news straight to your inbox and stay up to date on all of the property market trends and advice.

Established since 2005 we are a leading voice of authority and commentary on the UK property market. Our news is trusted by Apple News & Google News.

  • UK housing market
  • Mortgage & money
  • Buy-to-let landlords
  • Guides & advice

Talk to us

Speak to our UK property experts today:


+44 (0) 333 123 0320

Open from 9am-6pm GMT


+852 6699 9008

Open from 9am-6pm HKT