The latest report from specialist buy to let lender Paragon has reveals that more than four out of 10 landlords, 44%, said tenant demand increased during the third quarter and just 4% thought it declined.
When asked for their views on tenant demand for the next 12 months, almost half of landlords, 49%, said they expect tenant demand to continue to increase.
Rental income remained healthy for a third consecutive quarter with 34% of landlords reporting an increase and only 4% saying that it had decreased. Of those landlords who achieved an increase in the third quarter, 11% said it was between 2% and 4%.
It also found that there has been a shift in the types of properties that landlords are looking to purchase. Terraced houses were the most popular choice at 41% followed by flats at 35% and then bungalows which have surged in popularity from 2.7% in the second quarter to 10% in the third quarter.
‘Tenant demand has continued to increase for a third quarter, which is perhaps not surprising considering the current squeeze on the UK housing market as a whole,’ said Nigel Terrington, chief executive of Paragon.
‘More people than ever before are relying on the private rented sector so it is positive to see that landlords are looking to invest in their portfolios and are also diversifying the types of property in which they are investing in order to meet tenant demand,’ he added.
Paragon's PRS Trends Report also shows that yields dropped only very slightly from 6.2% in the second quarter to 6.1% and average portfolio value increased from £1.42 million in the second quarter to £1.48 million in the third quarter.
There was a continued improvement in the perception of availability of buy to let finance, with 27% of landlords saying they thought it was at least reasonably available and the average void period for the third quarter was 2.8 weeks.
It also found that one in 10 landlords are currently using social media channels for business purposes, mainly Twitter and Facebook, to advertise vacant properties for rent.
