Tenant demand grew during the final quarter of the year, according to Paragon Bank.
The lender found that 63 per cent of landlords saw demand rise in the fourth quarter of 2024.
And over a third said they’d seen a ‘significant’ increase in demand from tenants.
Demand was strongest in the North West, with three-quarters of landlords (75 per cent) reporting increases in tenant demand for the period.
This was followed by Yorkshire & The Humber, where a similar proportion of landlords (74 per cent) identified increased tenant demand, and the East Midlands where it was reported by just over seven in 10 (71 per cent) landlords.
High demand = rent hikes
Unsurprisingly, there is a link between increased tenant demand and rental inflation, said Paragon.
Rent increases were more likely to be reported by landlords in the most in-demand regions compared to the rest of the country, with the exception of the East of England.
In each of these areas, just under nine in 10 landlords say that rents are rising currently – 89 per cent in the East Midlands, 88 per cent in the North West and 87 per cent in Yorkshire & The Humber – compared to eight in 10 in the South West (81 per cent) and Outer London (79 per cent).
Half of landlords (51 per cent) said they are planning to increase rents across their own portfolio in the next six months.
The key driver for those looking to hike their rents is the increased cost of running a property, cited by seven in 10.
Landlords also sid they were planning rent increases to align with broader market rents (62 per cent), and keep up with increased mortgage costs (40 per cent).
Richard Rowntree, Paragon Bank managing director of mortgages, said: “Although tenant demand has come off its record highs, there remains a chronic supply demand imbalance across large parts of the country.
“Although it’s a complex issue with many factors at play, the supply and demand dynamic dictates that we pay more for goods and services that are in high demand and short supply.
“It is unsurprising then to see that the landlords in the regions seeing the most demand are amongst the most likely to see rents rising.”