Tenant demand on the increase
Tenant demand is continuing to grow in many parts of the buy-to-let market, according to the latest report from mortgage provider Paragon Group.
Its research shows that almost half of landlords saw a rise in demand for their buy-to-let properties during the first quarter of the year.
Only five per cent of those questioned said tenant demand had fallen.
The proportion of landlords reporting increase demand has now risen of the seven consecutive quarters.
And it looks set to continue its upward trend, with more than half of landlords anticipating an increase over the next 12 months.
Nigel Terrington, chief executive of Paragon Group, said there are several factors driving demand, including social housing reforms, lifestyle choices and the problems facing first-time buyers.
"We are seeing evidence that strong tenant demand is feeding through to higher rents," he added. "Prospects for landlords in the private rented sector are high and they can expect this to continue throughout, and beyond, 2011."
Paragon's report showed that average rental yields increased by 6.2 per cent during the first quarter of the year, while the average void period fell for the third consecutive quarter to just 2.8 weeks a year.
Landlord confidence is also rising, with almost a quarter of those questioned expressing optimism over the likely performance of their buy-to-let properties in the months ahead.
However, Mr Terrington warned that many landlords are still being held back by a lack of available mortgage finance and insisted that the issue needs to be addressed in order to create a "healthy and vibrant" private rented sector.
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