Landlords Report on an Increase in Rental Demand

Paragon Mortgages has released it's ' Private Rented Sector Trends report which indicates some positive news for demand in the rental market.

Landlords will be relieved to hear that there is a positive outlook for rental demand for the coming year after an 'avalanche' of negativity for Buy-to-let.

The report suggests that tenant demand is still strong in the private rented sector, with over a third of landlords interviewed currently experiencing growing demand for their rental properties, as more people move towards the rental sector.

Landlords expect this level of demand to continue over the coming 12 months, with four out of 10 predicting that tenant demand will be even higher than current levels by the end of the year.

The report also indicates that landlords yields have increased, with the average yield now at 6.1%, up from 5.7% in Q1 2008.

John Heron, managing director of Paragon Mortgages, said: "There are opportunities for residential property investors with cash to spend to expand their portfolios in the current market and maybe we are starting to see evidence of this.

"This doesn't necessarily mean that investors think that we have reached the bottom of the housing market. It is more likely that they are spotting bargains in local markets and are purchasing with a long-term view."