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Insight & Opinion

Landlord survey offers positive signs on tenant demand

Author: Gemma

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New research has provided cause for optimism in an area that is highly important to buy-to-let property investors: tenant demand. Strong demand for rental property means greater scope for yields and a lower risk of void periods.

The Q3 2019 Private Rented Sector Trends report from Paragon Banking Group was based on the views of 201 highly experienced landlords, most of whom have been in the sector for more than ten years.

Booming tenant demand

Around three out of ten respondents (29 per cent) said tenant demand is currently growing or booming – the highest proportion since the fourth quarter of 2018. This reversed a significant drop recorded in Q1 2019, when 21 per cent of landlords expressed this view.

The vast majority (81 per cent) of the panel said demand from tenants is currently stable, growing or booming.

John Heron, managing director of mortgages at Paragon, pointed out that the recent increase in the proportion of landlords feeling confident about rental property demand is in line with the latest information from the Royal Institution of Chartered Surveyors (RICS).

RICS has highlighted a trend of strong tenant demand and low supply combining to drive up rents across most regions.

Other key findings in the Paragon research indicated that large-scale landlords continue to be the most active, with ten per cent expecting to expand their portfolios in the next quarter, compared with only one per cent of small-scale landlords.

Brexit, and all the uncertainty accompanying it, will be having an impact on the plans of many property investors at the moment. However, as Jerald Solis, business development and acquisitions director at Experience Invest, recently told FT Adviser, there could be a “surge of activity” once the questions around the UK’s exit from the EU are answered.

To find out more about the UK property market and current opportunities available to investors, contact Experience Invest.

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