UK landlords report an increase in demand from tenants in Q3

UK landlords report an increase in demand from tenants in Q3

Landlords across the UK have seen a rise in demand in the third quarter of the year, according to the latest survey of buy-to-let owners nationwide. 

Paragon Mortgages asked landlords how their sentiment was in the three months to the end of September, and as many as 41 per cent said they had experienced a rise in levels of demand from potential tenants during the quarter. 

In terms of regional splits, the highest levels of demand were found in the East Midlands, where there were increases in the number of people looking to rent for 52 per cent of landlords. Conversely, the lowest rise in demand was seen in the north-east of England, where only 31 per cent of owners said the same. 

However, while the north-east had slower climbs in demand than anywhere else in the country, Paragon said that even this area showed how strong the market is as a whole. At the same time in 2014, the region had seen a rise in demand of just 23 per cent. 

The survey also highlighted the fact that the strength and depth in the private rented sector throughout this year has left yields both high and steady in the market in quarter three. 

For the nation as a whole, yields for buy-to-let owners now sit at between five and six per cent on average, giving investors in the market a very impressive return on their spend. 

The greatest proportion of landlords, approximately one-fifth, said their yield was between three and four per cent, while as many as one in every ten said they were experiencing more than ten per cent in yields. 

John Heron, Director of Mortgages at Paragon, said: "This research shows that yields, and tenant demand have remained strong throughout the third quarter, in common with 2015 overall. The figures reflect a steadily improving economic outlook for the UK as a whole and show that, more and more people are actively choosing the flexibility of making a home in the private rented sector."