Landlords expect increased demand from renters

According to research from Paragon Mortgages, a majority of private residential landlords expect the demand for their properties to increase over the next year.

The Trends report, which seeks the views of a panel of landlords, has shown that 54% expect tenant demand to increase over the next year, up from 38% last November and 47% in February. Whilst fears over property prices are a contributing factor, the main reason is that so many potential home buyers can no longer obtain a mortgage. The average first time buyer now needs a deposit of 13%, and with fixed rates averaging well over 7%, renting is being seen by many as the preferable option. John Heron, Paragon Mortgages managing director, said,

"We have consistently said that buy-to-let has strong counter-cyclical qualities and we are now seeing concrete evidence of this. Potential home buyers are postponing purchasing decisions because they either feel uneasy about the current market or they simply can’t get a mortgage, so they are renting. Combined with strong demand from students, immigrants and people that choose to rent as a lifestyle choice, this is putting an increased strain on the private rented sector’s stock. It is likely we will see void periods continue to fall over the coming months and yields continuing to rise as demand for rented accommodation grows."

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