Tenant demand reached a five-year high during the final quarter of 2020, research conducted on behalf of Paragon Bank has revealed.
The figure was up from 29 per cent reported in the previous quarter and 25 per cent recorded in the same period in 2019.
The research of over 800 landlords, conducted by consumer insight consultancy BVA BDRC, showed clear regional differences in the proportion of landlords recording growing tenant demand.
Six out of 10 (58 per cent) landlords in the South West reported growth in tenant demand, compared to just 10 per cent in central London.
Richard Rowntree, Paragon Bank managing director of mortgages, says: “We saw a clear upturn in tenant demand in the second half of 2020 after restrictions on the housing market were lifted.
“The strong levels of people looking for rented property continued during the final quarter, which may be related to renters wanting to secure a new property ahead of any new lockdown restrictions, which of course came from November onwards.
“The housing market is also reporting high levels of tenancy renewals, so good quality rental property is at a premium in desirable markets.
“I would expect that to continue into the new year and throughout 2021.”
Despite healthy levels of tenant demand, the majority of landlords plan to keep rents at the same level over the next six months.
Nearly two thirds (64 per cent) say they have no plans to change rents, 15 per cent say they will increase rents and nine per cent plan to lower rent levels.
He adds: “Despite the pressures on landlords due to volatile economic conditions and rising unemployment hitting tenants’ income, confidence is strong and robust.
“Tenant demand is playing a key role in that.”