Tenant demand continued to climb during the third quarter of the year, research by specialist buy-to-let lender Paragon has revealed.
The Private Rented Sector Trends Report for the third quarter gives a detailed overview of the sector and landlords’ views on performance.
More than four out of ten landlords (44%) said tenant demand increased during the third quarter and just 4% thought it declined. When asked for their forecast of tenant demand for the next 12 months, almost half of landlords (49%) said they expect it to continue to increase.
Rental income remained healthy for a third consecutive quarter with 34% of landlords reporting an increase and only 4% saying it had decreased. Of those landlords who achieved an increase in Q3, 11% said it was between 2% and 4%.
The report also reveals a shift in the types of properties that landlords are looking to purchase. Terrace houses were the most popular choice at 41% followed by flats (35%) and then bungalows – which have surged in popularity from 2.7% in Q2 to 10% in Q3.
Nigel Terrington, chief executive of Paragon, said: “Tenant demand has continued to increase for a third quarter, which is perhaps not surprising considering the current squeeze on the UK housing market as a whole.
“More people than ever before are relying on the private rented sector, so it is positive to see that landlords are looking to invest in their portfolios and are also diversifying the types of property in which they are investing in order to meet tenant demand.”
Paragon’s PRS Trends Report for Q3, from July 1 to September 30, also shows:
• Yields dropped only very slightly from 6.2% in Q2 to 6.1% in Q3
• Average portfolio value increased from £1.42m in Q2 to £1.48m in Q3
• Continued improvement in the perception of availability of buy-to-let finance, with 27% of landlords saying they thought it was at least reasonably available
• Average void period for Q3 was 2.8 weeks
• One in ten landlords are currently using social media channels for business purposes, mainly Twitter and Facebook, to advertise vacant properties for rent
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Comments
@ Realising Reality
...."As an agent, it is your job to adequately explain to your clients what the true position is about how much their property could be sold for and approximately when by....".
I have thought about it, which is more than can be said of some. If you read my post again you will see that is what I have said - advise! The asking price is not the agents decision but the agent can acept the instruction or not not..
Ray, I've got to reply to you.
As an agent, it is your job to adequately explain to your clients what the true position is about how much their property could be sold for and approximately when by.
Think about it.
@Realising Reality.
One must always remember that the agent can only advise, they do not own the property the vendors do and the decision is theirs.
Regards.
The continued rise in demand for rentals is, to a large extent, as a result of the distressed private housing market.
Many owners are having to sell first and then rent, whilst they are contemplating buying once again.
With asking price-chaos, as at present, its hard for buyers to get the right terms having found the house they would like to buy.
It's impossible to overestimate just how many agents take-ons have been at prices actually set by vendors with little or no experience in determining current market prices. The percentage is enormous.
Vendors seem to be driven by the fear of seeing all the other high asking prices quoted on the High Street, knowing they too must eventually buy, if they are to remain owner-occupiers and retain any sort of stake in the housing market as the investment of choice, for their futures.
Market failures of this kind are what results in people being forced to rent instead of buying and some may never, in fact, be able to return to being owner occupiers, unless and until asking prices start to follow completion values more closely once again.
The strange thing is, It's within agents' powers to correct this massive imbalance, and save their own skins in the process of doing that. The question is, will they?