February 5

Surging Demand: The Rental Property Revival


The rising popularity of serviced apartments attracts guests seeking hotel-like comforts while maintaining their privacy. To stand out among the competition and increase profitability, it’s crucial to enhance your marketing strategies for your multiple properties in town.

In the final quarter of 2023, findings from Paragon Bank’s research revealed that six out of ten landlords experienced a surge in tenant demand for their properties. The study, conducted on behalf of Paragon Bank, delved deeper into the dynamics of the rental market. More than a third of landlords reported a notable increase in tenant demand during the three months leading up to December. Additionally, another quarter of landlords observed a modest uptick in demand during the same period, painting a comprehensive picture of the growing interest in rental properties.

The research underscores the evolving landscape for landlords, indicating a notable shift in tenant behavior. With a significant proportion of landlords witnessing an uptick in demand, it suggests a dynamic market that could influence strategic decisions for property owners. Understanding these shifts becomes crucial for landlords navigating the rental landscape, as they respond to the changing demands of tenants and adapt their strategies to meet the evolving market conditions.

In terms of demand fluctuations, the findings point out that a mere 16% of landlords noted no change, while an even smaller fraction, just 4%, reported a decline. This data emphasizes the overall positive trend in tenant demand across the surveyed landlord community.

A closer examination of the regional data unveils intriguing patterns. The North West emerges as a hotspot, with a staggering 75% of landlords reporting an increase in tenant demand for the specified period. Following this robust trend, Yorkshire & The Humber closely mirrors the pattern, boasting a similar proportion of landlords, 74%, witnessing heightened demand. The East Midlands contributes to this regional narrative, with just over seven in 10 landlords, specifically 71%, indicating an upswing in tenant demand. This granular breakdown provides a comprehensive understanding of the diverse regional dynamics at play within the rental property market.

The survey, conducted by BVA BDRC, brings attention to a noteworthy association between heightened tenant demand and the occurrence of rental inflation. This connection implies that regions experiencing an upsurge in tenant interest are more likely to witness landlords reporting increases in rental prices. This trend, however, doesn’t uniformly apply across the entire country, with one exception being the East of England.

When delving into the regional breakdown, it becomes evident that landlords in the most sought-after areas are notably prone to reporting rent hikes. This underscores a dynamic relationship between demand and pricing within the rental market. Interestingly, the East of England stands out as an anomaly in this pattern, with landlords in this region deviating from the trend observed elsewhere. This nuanced insight provides valuable information for landlords and tenants alike, as they navigate the intricate landscape of rental property dynamics.

In several regions, almost nine out of ten landlords indicate that rents are currently on the rise. The specific figures stand at 89% in the East Midlands, 88% in the North West, and 87% in Yorkshire & The Humber. Contrasting these, regions such as the South West and Outer London show slightly lower percentages, around eight out of ten, with figures at 81% and 79%, respectively.

Looking ahead, a notable 51% of landlords are planning to implement rent increases across their portfolios in the next six months. Among the factors driving this decision, the increased cost of running a property takes precedence, identified by 70% of landlords. Additionally, other factors contributing to planned rent hikes include aligning with broader market rents, as noted by 62% of landlords, and increased mortgage costs, though this has decreased by eight percentage points compared to the previous quarter.

Richard Rowntree, Paragon Bank’s Managing Director of Mortgages, reflects on the situation, emphasizing the complexity of the issue with various factors at play. He notes that the supply and demand dynamic plays a crucial role in determining the cost of goods and services in high demand and short supply. Unsurprisingly, landlords in regions experiencing the highest demand are among the most likely to witness rising rents. Rowntree highlights the importance of a healthy and adequately supplied Private Rented Sector (PRS) to maintain rent levels that are affordable for the millions residing in rented homes. This insight underscores the broader implications of the supply-demand imbalance on the rental property landscape.


Housing Demands UK, Letting Market UK, Paragon Bank

You may also like

Leave a Reply

Your email address will not be published. Required fields are marked

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}

Get in touch

0 of 350