Tenant demand has risen to five-year high, according to Paragon Bank.

The buy-to-let specialist lender said that the proportion of landlords reporting increasing tenant demand has hit the highest level since 2016.

Four in 10 landlords have seen increased tenant demand over the past three months, with 18.2% saying it has grown ‘significantly’ and a further 20.3% reporting smaller increases.

There was also a two percentage point fall in those landlords who have experienced a dip in demand.

Regional splits

With the exception of central London, all regions have seen a year-on-year increase in landlords reporting a ‘significant increase’.

Yorkshire and The Humber has seen the biggest rises after 65% of landlords reported increased tenant demand, 28% significantly and 37% slightly. This was closely followed by Wales and the South West where a net increase in tenant demand over the past three months was reported by 64% and 63% of landlords respectively.

Moray Hulme, Paragon Bank director of mortgage sales, said: “It’s great to see that tenant demand reported by landlords to hit the highest level since 2016.

“Quarter two of 2020 was a time of real uncertainty and this was reflected in the record low levels of demand that landlords saw. Demand bounced back the following quarter and has been rising ever since. This highlights resilience of the private rented sector and suggests that a growing number of people have turned to it at a time when the stability of a good quality home is ever important.”