The tenant demand for residential property has increased drastically over the past 12 months and is forecast to continue in this upward trend throughout the coming year, however active landlord numbers in the country have dwindled.
In newly released data from Paragon, it was revealed that almost 40% of landlords believe that tenant demand for residential property will increase during the next 12 months after an impressive end to the previous year.
Paragon’s trends research found that 27% of landlords had experienced an increase in tenant demand towards the end of 2019, and 37% are expecting this demand to continue with impressive growth throughout 2020. Just 7.3% of landlords are expecting a decrease in demand.
Richard Rowntree, Paragon Managing Director of Mortgages, said: “Although homeownership is increasing on the back of Government policies, there is clearly still growing demand for rented property for a variety of reasons.
“We expect to see tenant demand to continue to increase in the coming years and it’s important the Private Rented Sector is adequately financed to ensure tenants have a good choice of property and rental inflation is kept under control.”
Despite the constant increase of tenant demand showing no signs of slowing down, it was recently found that the number of landlords operating in the UK has fallen to its lowest number in years.
Hamptons International’s monthly lettings index found that in 2019, the number of UK landlords fell to just 2.66 million – the lowest amount in seven years. The index revealed that landlord numbers had decreased by 8% since the count peaked in 2017. Factors such as the introduction of the stamp duty surcharge and reduction in mortgage tax relief, on top of the mass amount of political and economic uncertainty throughout the year seems to have driven a large number of landlords out of the market.
Despite all these factors, average rents across Great Britain have continued to rise and hit £998 per month in January – a 3.6% increase since the year prior.
Aneisha Beveridge, head of research at Hamptons International, said that despite the decrease in landlord numbers, the outlook for the market is still promising: “Those who have stayed tend to have bigger portfolios – a further sign that the sector is professionalising.
“The average landlord in Great Britain owned 1.93 properties last year, the highest level since 2009. Rents rose in every region across Great Britain in January to stand 3.6% higher than at the same time last year.”
2019 was a turbulent year in almost every aspect of the property market, and that was no different in the private rented sector. The decrease in landlord count has only added to the already high tenant demand, and those who stuck with the market throughout the year are now reaping the rewards. With the conclusion of the general election and a drastic improvement in both market sentiment and stability, it seems like 2020 is set to be a strong year for both landlords and the private rented sector.
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