The specialist buy-to-let (BTL) lender carried out the study for its PRS Trends report, surveying nearly 800 landlords about demand for their lets during the first quarter of the year.
The majority – 43% – said that tenant demand is very strong, with a further 40% stating that it is quite strong.
In fact, only 1% of landlords noted weak tenant demand, while 12% reported it to be average.
Regional split
The highest proportion of landlords experiencing strong tenant demand was in the South West, said Paragon.
There, more than half – 54% – said it was very strong and 30% said it was quite strong.
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Similar levels of demand were recorded in the North East, where 51% perceived it to be very strong and an additional 36% strong.
However, in Yorkshire and the Humber, just 49% of landlords stated that demand was quite strong and 31% said it was very strong.
Richard Rowntree, managing director for mortgages at Paragon Bank, said: “Although recent reports have pointed to an improvement in stock levels within the private rented sector, this research is evidence that investment in rented homes is still very much needed, as demand still outweighs supply. Making more homes available for tenants provides them with greater choice and is one of the most effective ways of keeping rental inflation at affordable levels.”
“We can only see tenant demand levels growing, fuelled by forecast population growth and household formation over the next decade. Rental housing supply needs to keep pace to ensure those who want or need to rent a home have a choice of property at a reasonable price.”
Related: Rent rises for existing tenants higher than for new lets
