Analysis by Paragon Bank found that 39% of landlords saw tenant demand rise between April and June this year, with a 2 percentage point dip in the proportion of landlords reporting a fall in tenant demand compared to the first three months of the year. More than 750 landlords were questioned by Paragon with all regions of the UK, apart from central London, seeing a year-on-year increase in landlords reporting a ‘significant increase’ in demand.
Yorkshire and The Humber has seen the biggest rise, with 65% of landlords there reporting increased tenant demand, followed by Wales and the South West where an increase in over the past three months was reported by 64% and 63% of landlords respectively.
Moray Hulme, director at Paragon Bank, said: “It’s great to see that tenant demand reported by landlords has hit the highest level since 2016. 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.”
Part of the rise in demand could be due to the limited supply of properties to buy, which means more sellers are renting before they purchase. Hamptons’ latest Monthly Letting Index shows that 10% of new tenancies agreed this year were to homeowners who have sold up, the highest level since 2016. It says there were 43% fewer homes available to rent in July than at the same time last year as former homeowners compete with longer-term regular tenants.
Growing number of Buy to Let mortgage optionsRising tenant demand is good news for landlords, who are also benefiting from some of the lowest Buy to Let mortgage options ever seen. Several lenders, including Barclays, NatWest and Virgin Money have recently cut their Buy to Let mortgage rates, whilst others such as Precise Mortgages and specialist lender Pepper Money have reintroduced higher loan-to-value limits on Buy to Let mortgages.
There are also a growing number of lenders offering fee-free mortgage deals, including The Mortgage Works, Leek United Building Society and Leeds Building Society. Bear in mind that fee-free deals may sometimes have slightly higher rates than those with arrangement fees, so it’s worth seeking professional advice if you want to find the most cost-effective option for you.