Research by mortgage lender Paragon found that the average void period – the length of time between the end of one tenancy and the start of the next – was 2.6 weeks.
This is the lowest figure recorded since 2002 and is down from a high of 3.4 weeks in 2010.
Average yields have continued to grow during the last quarter, with the typical yield growing to 6.4%. Landlords expected this figure to remain steady in the next 12 months.
Of landlords looking to purchase more properties, some 43% said they were seeking terraced houses. The number looking for semi-detached homes dropped from 38% to 27%.
The survey reported that tenant demand remained strong, with 40% of landlords describing the market as either ‘growing’ or ‘booming’.
Demand for longer-term tenancies of two years or more remain low. Landlords said that typically than one in 10 tenants asks for a longer tenancy, usually those with families.
John Heron, director of mortgages at Paragon, said: “Our latest data is indicative of a market growing steadily and sustainably over the long-term. With low void periods and steady tenant demand, which is expected to continue growing, yields remain on a gradual upward trend and landlords are confident they will continue to do so.
“The data also reveals the changing demographic of those choosing to live in the PRS. This is reflected in the buying intentions of landlords which seem to be shifting slightly away from investing in multi-occupancy blocks, towards terraced housing – often more suited to young families.”