News
Tenant demand remains strong despite financial challenges
Friday 24th February 2017
Demand for rented property remains high according to latest trends report by Paragon Mortgages.
Of the 204 landlords surveyed, 94% described tenant demand as stable or growing, with less than one in 30 suggesting a decrease. Tenant demand continues to affect average void periods, which remain unchanged at 2.7 weeks, with 48% of landlords reporting that their properties stand empty for less than two weeks. Average yields are also remarkably stable, at 6.1%.
All sounds very promising in light of the new tax changes introduced to the private rented sector. And landlords have begun to develop strategies to mitigate the impact of these changes, causing the number of landlords looking to sell to drop to 17%, while the proportion of landlords considering a buy-to-let purchase grew to 13% in Q1 of 2017, up from a record low of 9% in the same period last year.
John Heron, managing director of Paragon Mortgages said "With no material improvement in the supply of new housing against a backdrop of strong population growth and household formation, it is no surprise that landlords are continuing to experience strong rental demand. It is promising, therefore, that there has been some improvement in landlord buying intentions, albeit from a low base."
"Any boost this gives to improving supply to the sector, however, needs to be balanced against the additional upward pressure we are likely to see in rents as a result of the phased impact of the changes to taxation of rental income." he concluded.
The full copy of Paragon Mortgages Trend Report for Q4 2016 is available to download.