Tenant demand reached a five-year high during last year - the highest level since the first quarter of 2016, as almost a third of landlords reported rising levels of enquiries for rental accommodation.
According to the research from Paragon Bank, the level of tenant demand is up from 29% on the previous quarter and well above the 25% in the same period a year ago, but the data showed some regional differences in the proportion of landlords reporting higher demand. The research of over 800 landlords, conducted by BVA BDRC, showed clear regional differences in the proportion of landlords recording growing tenant demand.
58% of landlords in the South West reported growth in tenant demand, compared to just 10% in central London. Other strong regions included the West Midlands (48%), Wales (44%) and the South East (42%).
Despite the pandemic and economic uncertainty, rents across the UK are also continuing to rise with Homelet’s latest Rental Index data showing that the average rent in the UK is now sitting at £981, up by 0.2% from last month, and up 2.9% on last year. When London is excluded, the average rent is now £839, this is up 0.1% on last month and 5.8% last year. Ten of the twelve regions showed an increase in annual variance, with the largest, like last month, being the South West at 8%.
Property investment specialists, Thirlmere Deacon, say they have experienced a surge in demand from landlords wanting to invest in BTL property in the North, as tenant demand and rent prices continue to grow across the region. Properties offering more space, both in and outside are proving very popular with families and young professionals.
Stuart Williams, Founder and CEO of Thirlmere Deacon, commented: “Private landlords are continuing to plug the gap in the chronic undersupply of housing in many parts of the UK and are playing a crucial role in meeting the changing needs of tenants.
“However, the rising rents and record tenant demand does not mean record profits for property investors in the short-term. Buy-to-let has not suddenly become more profitable and neither has it suddenly become less popular. It's about looking long-term. Whenever buying property, investors should be looking five, eight, 10 years down the road, at least.
“Location has been key during 2020 and this theme will continue into 2021. Demand has been shifting away from London for some time and the number of relocations skyrocketed, in a trend that’s set to continue. Large cities away from the capital have seen increased interest but there are other locations that are well worth considering that can offer better value for money and exciting prospects.
“Newcastle is one of the fastest-growing cities in the UK, with over 14,000 new jobs expected over the next 12 years and the city’s population is projected to reach over 310,000 by 2030 while the region's population is projected to be 2.75 million by 2030.
“Well known for its energy, friendly atmosphere and nightlife, Newcastle was recently listed in PWC’s Good Growth for Cities report as one of the UK’s top 5 most improved city regions. Economists are also predicting that throughout the 2020s thousands more jobs will be created in the city.
“So Newcastle is a great place for BTL investors as demand for quality rental accommodation is very high amongst students and young professionals. Our development, Newcastle Central Apartments are located in the very centre of Newcastle at one of the city’s most exciting locations which is currently in the throes of considerable regeneration. This prestigious apartment building is ideally located for those working or studying in the city, within walking distance of train stations, shopping centres, several hospitals and under 1km from both of the city’s universities.
“This development will easily be one of the finest in the city and is being completed by a developer who has an impressive track record. As with all the developments we propose to our clients the property and the location have been carefully considered and fully vetted by our team. Originally built as an office development, it is now the subject of a visionary multi-million-pound conversion scheme that will create 152 top-quality apartments.
“Newcastle is a popular regional centre for shopping, culture, leisure and employment. When it comes to making the most of all these city centre attractions, Newcastle Central Apartments offer the perfect base.”