According to research by Paragon Bank, 37 per cent said demand from tenants increased significantly during the three months to the end of December, while a further 26 per cent experienced slight increases.
Approximately 16 per cent reported no change in demand and only four per cent felt it had decreased.
Looking at it from a regional perspective, tenant demand was strongest in the North West, with three-quarters of landlords reporting increases in tenant demand for the period. This was followed by Yorkshire and the Humber at 74 per cent, and East Midlands at 71 per cent.
Rental inflation link
The report added that there was a link between heightened tenant demand and rental inflation, with rent increases more likely to be reported by landlords in the areas with the highest tenant demand, with the exception of the East of England.
In the North West, Yorkshire and the Humber and East Midlands, around nine in 10 landlords said rents were rising, compared to around eight in 10 for regions like the South West and Outer London.
More than half of landlords are planning to up rents in their own portfolios in the next six months, with 70 per cent pointing to the increased costs.
Around 62 per cent pointed to being in line with market rents and 40 per cent pointed to mortgage costs, although this is eight per cent down on the prior quarter.
‘Chronic’ supply-demand imbalance
Richard Rowntree, Paragon Bank’s 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. This illustrates how a healthy, sufficiently supplied private rented sector (PRS) is needed to maintain rent levels that are affordable for the millions of people that live in rented homes.”
