Paragon reports booming tenant demand

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by Gill Montia

Buy-to-let lender, Paragon, has reported that a record number of landlords are seeing growth in tenant demand.

In its Mortgage Trends survey, 51% of respondents described tenant demand as either “growing” or “booming” during the three months to the end of September.

The result shows a 33.9% rise on the second quarter of 2008 and puts optimism on growth at its highest level since Paragon introduced the question in its survey, in 2004.

A mere 3.6% of landlords reported a fall in tenant demand during the third quarter of this year and 41.7% described demand as “stable”.

Looking to the future, 57.8% of landlords expect growth to continue, up from 53.9% in the second quarter of 2008.

Meanwhile, 32.3% of landlords expect tenant demand to stabilise over the next 12 months and 5.2% are predicting a fall from current levels.

The survey also revealed that the average void period experienced by landlords is 2.6 weeks per year, down from 2.7 weeks in the three months to the end of June.

Paragon’s managing director, John Heron, comments that people reluctant or unable to get a foot on the property ladder are pushing up demand and it is important that the role of the private rented sector is recognised by Government and that landlords are not deterred from investing in their portfolios by over regulation.