The latest data shows that tenant demand is remaining at high levels across the UK. Where are landlords seeing the strongest demand?
The private rented sector (PRS) has remained busy in recent months. Numerous reports are showcasing the strong demand being seeing in the sector.
An average of 88 prospective private renters were registered per estate agency branch in the UK during the month of June. While this is lower than May’s figure of 97, it’s the highest figure on record for the month of June. The previous high for that month was 79 prospective tenants registered per branch.
As it was the most in-demand June on record by Propertymark, this demonstrates a strong need for buy-to-let property in the UK. The rental market continues to expand, particularly in certain regions.
Mark Hayward, chief policy advisor at Propertymark, comments: “It is brilliant to see rent continuing to flow this month with rent reductions at a record low for the month of June, showcasing the continuation of the current booming rental sector.
“We have a close eye on the overall sector for the rest of the year as the current strength of the sales market may be off-putting to private rental investors, and any potential impending taxation on property will be a consideration for all landlord types, but overall, it remains fantastic to see new potential tenancies at a monthly high for June.”
Resilient private rented sector
Just under 39% of landlords have reported increasing tenant demand throughout the past three months. This is the highest level since 2016. Breaking it down, 18.2% said this has grown significantly. And a further 20.3% stated they have witnessed slight increases. This is according to a survey of more than 750 landlords carried out by BVA BDRC on behalf of Paragon Bank.
The percentage of landlords seeing growing demand has risen by 8% since the prior quarter. There’s a continuing trend of increasing tenant demand as there has been a 25% rise year-on-year. Additionally, there was a 2% decrease in the proportion of landlords reporting a fall in tenant demand compared to Q1 2021.
Moray Hulme, director of mortgage sales at Paragon Bank, says: “It’s great to see that tenant demand reported by landlords to hit the highest level since 2016. Quarter two of 2020 was a time of real uncertainty and this was reflected in the record low levels of demand that landlords saw.
“Demand bounced back the following quarter and has been rising ever since. This highlights resilience of the private rented sector and suggests that a growing number of people have turned to it at a time when the stability of a good quality home is ever important.”
Where is demand increasing the most?
Rental demand varies from area to area. Propertymark revealed the West Midlands led the way with the highest number of new tenants registered per branch. The region recorded an average of 128 prospective tenants. In recent months, Birmingham in particular has seen strong tenant demand as renters are returning to city centres.
The additional research from Paragon Bank showed all regions of England and Wales have seen a year-on-year increase in landlords reporting a significant increase in demand. Yorkshire & the Humber has been home to the largest proportion seeing rises in tenant demand. In the region, 65% landlords reported increases.
This shows parts of the north and Midlands are continuing to see growing demand in the PRS. Additionally, greater regeneration and investment in these areas are making them more appealing places to live. This makes it some of the top locations for landlords to look at for expanding rental markets.
