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UK landlords report tenant demand is stable or growing

Landlords also reported an average yield across their rental portfolio of 6.2% in the second quarter of the year, a slight increase on the previous quarter when the average was 6.1%. The average yield has remained around this level for the past 12 months.

In the second quarter 38% of landlords said that they were feeling more optimistic about the prospects for their rental portfolios. Some 56% stated that there had been no change in their views, and just 4% said they were feeling pessimistic about prospects.

Looking ahead, 16% of landlords are planning to add to their rental portfolios during the third quarter.

The survey also shows that there has been no change in the types of property landlords are planning to invest in, with terraced houses remaining the most popular with 55% of those expecting to buy choosing this property type.

There has been a slight increase in popularity of detached houses, with 15% of landlords expecting to buy this property type compared to 12% last quarter.

Some 72% of landlords said that they thought rental arrears levels would remain stable in the next year, only 11% expect levels to increase. Overall, the feedback from landlords suggests that only marginal movement in tenant arrears is predicted.

‘It is interesting to see the improvement in confidence amongst landlords in the private rented sector. We are seeing much more activity in the private rented sector and, in turn, the buy to let market as a result of continuing strong rental demand and the investments made by landlords,’ said John Heron, managing director of Paragon Mortgages.

‘Tenant demand is clearly staying very healthy, and this is likely to remain a common trend over the coming months, particularly as we are still not seeing the level of house building that the wider housing market so desperately needs,’ he explained.

 

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