More than four in five landlords (83%) are reporting strong levels of tenant demand, new research from Paragon Bank has indicated.

The bank’s latest findings showed that 43% believe demand is “very strong”, while a further 40% said it was “quite strong”.

Paragon’s research, based on a study among 771 landlords, found that just 1% of landlords reported “weak” tenant demand, while 12% said it was “average”.

Managing director for mortgages at Paragon Bank, Richard Rowntree, said: “Although recent reports have pointed to an improvement in stock levels within the private rented sector, this research is evidence that investment in rented homes is still very much needed as demand still outweighs supply.

“Making more homes available for tenants provides them with greater choice and is one of the most effective ways of keeping rental inflation at affordable levels.”

The study, conducted by research agency Pegasus Insight, also uncovered regional differences in demand across England and Wales.

Paragon revealed that the highest proportion of landlords experiencing strong tenant demand was in the South West, where 54% said it was very strong and 30% quite strong. Similar levels of demand were recorded in the North East, where 51% perceived it to be very strong and an additional 36% strong.

Yorkshire and The Humber was the region deemed to have the lowest levels of demand, after 49% of landlords suggested it was quite strong, and 31% very strong.

Rowntree added: “We can only see tenant demand levels growing, fuelled by forecast population growth and household formation over the next decade. Rental housing supply needs to keep pace to ensure those who want or need to rent a home have a choice of property at a reasonable price.”

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