The research by BVA BDRC on behalf of Paragon Bank indicates that 37% of landlords reported a significant rise in tenant demand during the three months leading up to the end of December, while an additional 26% observed slight increases.
The data analysis by region highlighted that the North West had the most substantial demand, with 75% of landlords reporting increased tenant demand. This marks yet another piece of good news for the North West property market, following Savills’ cross-sector forecast, in which the real estate services company expects North West buy-to-let to see 9.2% returns over the next 12 months.
Following closely were Yorkshire & The Humber, where 74% of landlords identified rising tenant demand, and the East Midlands, with 71% reporting a similar trend.
The survey also established a correlation between increased tenant demand and rental inflation. Landlords in the most in-demand regions were likelier to report rent increases, except for the East of England. In these high-demand areas, such as the East Midlands (89%), the North West (88%), and Yorkshire & The Humber (87%), nearly nine in 10 landlords indicated that rents were currently on the rise, compared to around eight in 10 in the South West (81%) and Outer London (79%).
Looking ahead, 51% of landlords plan to raise rents across their portfolios in the first half of 2024. The primary motivator for this decision is the increased cost of running a property, cited by 70% of landlords. Other factors contributing to planned rent increases include adjustments alongside broader market rents (62%) and rising mortgage costs (40%), though the latter has seen an 8% decline compared to Q3.
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