Landlords’ assessment of tenant demand has improved for the first time since early 2024, latest research from Pegasus Insight reveals.
Its Q2 2026 Landlord Trends survey finds that 63% of landlords describe demand in their local market as either “very strong” or “quite strong”, up from 58% during the previous quarter.
The proportion reporting “very strong” demand increased by seven percentage points to 29%, while a further 34% characterised conditions as “quite strong”.
Meanwhile, 23% consider demand to be average and just 5% describe it as weak. The results measure landlords’ perceptions rather than the number of enquiries received or tenants competing for each property.
TWO-YEAR DECLINE ENDS
The latest improvement follows eight consecutive quarters in which the proportion of landlords reporting strong demand declined.
The figure stood at 83% in Q1 2024 before falling to 77% by the end of that year. It declined further during 2025, reaching 61% in Q4 and a two-year low of 58% in Q1 2026.
Although the latest result remains substantially below the exceptional levels recorded two years ago, Pegasus Insight says the quarterly recovery demonstrates that demand for privately rented homes remains considerable.
SUPPLY REMAINS THE CONCERN
The research company warns that the improvement coincides with continued pressure on rental supply, with its previous findings showing landlords are more likely to sell properties than make purchases.
Mark Long (main picture, inset), Founder and Director of Pegasus Insight, says: “Tenant demand has been gradually normalising from the exceptional levels recorded in 2024, so a five percentage point rise this quarter suggests that the need for rental accommodation remains considerable.
“It is particularly notable that the increase is being driven by landlords reporting very strong demand. Almost three in ten now fall into this category, while just 5% describe demand as weak.”
Long argues that strengthening demand combined with limited landlord investment could reduce tenants’ choice and place further upward pressure on rents.
He adds: “At a time when housing supply is already constrained, policy needs to recognise the vital role played by private landlords in providing homes.
“The priority should be encouraging investment and retaining existing rental stock, and the new government should be wary of introducing further barriers that risk reducing supply.”
