Buy to Let

Tenant demand for buy-to-let property remains consistent

Paula John
Written By:
Paula John

Rental yields are growing modestly while tenant demand for buy-to-let property remains consistently high according to Paragon Mortgages’ private rented sector trends report.

The report is based on data collected throughout quarter three and found that the stability seen throughout 2015 in the private rented sector has continued in the past three months.

The report revealed that landlords expect conditions to remain stable over the medium term with yield growth and tenant demand predicted to remain the same over the coming 12 months.

John Heron, director of Paragon Mortgages, said: “In Q3’s PRS Trends Survey we see the overall trend of 2015 continuing. Yields are growing modestly and tenant demand remains consistent. And despite regulatory and taxation changes on the horizon, the expectation amongst landlords is for the picture to remain the same over the coming year.”

More than half of those landlords surveyed by the lender reported steady tenant demand over the quarter, while 40 per cent said tenant demand was either ‘growing’ or ‘booming’. The percentage of respondents expecting tenant demand to remain stable over the coming 12 months, or grow, has increased from 85 per cent to 89 per cent.

The data also shows that average yields have grown over the past three months from 6.3 per cent to 6.4 per cent. This improvement is in line with steady growth seen throughout 2015.

On the question of whether or not landlords intend to purchase properties over the next year, the figures again show a steady market, and a slight increase in optimism. Those intending to buy are up from 16.8 per cent to 18.4 per cent.