Demand for rental properties is at an all-time high but is leading to a supply shortage is some areas, new analysis has revealed.
Landlords have been experiencing rising levels of tenant demand for homes since the first lockdown and this need for private rented accommodation looks only to be increasing.
According to the survey by Paragon Bank, seven out of 10 landlords reported rising tenant demand between June and September – the third quarter (Q3) of the year.
This, said Paragon, was a ‘record level’. Indeed over a third of those quizzed said the increase had been ‘significant’.
Richard Rowntree, Paragon Bank managing director, explained how the pandemic had been a strong influencing factor on the supply and demand ratio. He said it reflected the shift in housing need created by the virus.
“The third quarter of the year is usually a busy one for the private rented sector (PRS) with graduates starting new jobs, the beginning of the academic year and people turning to housing once the holiday season is over,” Richard said.
“With this seasonal demand added to already high levels of tenant demand, we are beginning to see a shortage of property in certain parts of the PRS, which is leading to rental inflation. The sector needs to expand to meet these exceptional levels of tenant needs.”
London
While the average UK trend for increasing demand is echoed in each of the regions, there were some places where demand was not as high.
While places such as the South West and South East experienced increased demand of 79% and 74% respectively, in the North East it was much lower at 59%.
Meanwhile in the capital this figure fell to 54% amongst those managing portfolios in central London. Paragon said this was, in part, due to the region seeing the highest levels of decreasing demand (16%).
Despite this, the data suggests that a significant shift is being seen in appetite for central London living as people continue to return to the capital – the same period in 2020 saw a net increase in tenant demand reported by just 16% of Central London landlords, while 58% reported demand was decreasing.
