Over seven in 10 landlords (71%) saw rising levels of tenant demand during the third quarter of the year, a new record high, new Paragon Bank research has revealed.

The latest figure was up from the previous record of 67%, recorded in Q2.

Paragon confirmed the Q3 figure marks a new all-time high across the 12-year period that research agency, BVA BDRC, has tracked the metric on behlf of Paragon. Just 3% of landlords reported that tenant demand had fallen.

Regionally, the strongest levels of tenant demand could be seen in the West Midlands, with 76% of landlords in the region reporting an increase, followed by Wales (75%), the South East (74%) and East Midlands (73%). The North East (65%) and the East of England (61%) experienced the lowest proportion of landlords with tenant demand increases.

Also linked to increased tenant demand, landlords were reporting rising rents in Q3, with 87% identifying this as a current trend in areas where they let properties, unchanged from last quarter. Seven in 10 landlords (70%) said they had increased rents across their own portfolio within the last 12 months, a figure up from 65% in Q2.

A lower proportion of landlords, 54%, are planning to raise rents across their portfolios in the next six months, up by three percentage points since last quarter. Those planning to increase rents anticipate doing so by an average of 8.4%.

Managing director for mortgages at Paragon, Richard Rowntree, said: “During the first two quarters of the year we saw record levels of tenant demand reported by landlords. For this to be surpassed in Q3 highlights how the imbalance between the supply of rented homes and demand from renters is not improving.

“This reduces choice and increases competition for renters, while fuelling rental inflation, a scenario that often impacts the most vulnerable to the greatest degree.

“With social housing unable to meet this demand and home ownership aspirations hindered by cost of living pressures, further investment in the private rental sector cannot be delayed.”

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