Paragon: Tenant demand to see further increases in 2012
Posted by Sue Hopson
Buying to let in Oxford or elsewhere in the UK this year could prove lucrative, with tenant demand set to continue increasing throughout 2012, according to mortgage provider Paragon.
A poll by the specialist buy-to-let lender found that 56 per cent of landlords expect tenant demand to grow in 2012, compared to 45 per cent who felt likewise at the beginning of 2011.
Just six per cent of those questioned thought that tenant demand would decline in 2012.
"It is no surprise that landlords are expecting a healthy level of tenant demand in the New Year, based on the levels of demand we have seen steadily increase throughout the past 12 months," said Nigel Terrington, chief executive of the Paragon Group.
A rise in demand could also help further increase rental yields for those who make a UK property investment.
Nearly half (45 per cent) of landlords surveyed predicted rent levels will increase over the coming year, whereas 53 per cent said that they would remain stable - only two percent thought rent levels will decrease.
"2011 was certainly a good year for the buy-to-let market, with not only increasing tenant demand but landlords investing in their portfolios, low levels of arrears and more available finance," said Mr Terrington.
"With the success of 2011 to build on, I believe the private rented sector will continue to perform and provide a valuable tenure choice for even more people in 2012."
However, he warned that 2012 will also bring challenges for the sector, such as the knock-on effects of uncertainty in Europe and wider financial markets.
"But I believe that the foundations that we laid as a sector in 2011 will allow lenders and landlords to continue to do business, in particular if we see a greater level of product innovation. We should look to 2012 with optimism as it is sure to bring further opportunities," he added.
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