Tenant demand in the private rented sector has softened slightly over the past year but remains high by historical standards, research from Pegasus Insight reveals.
The latest Landlord Trends survey shows that 68% of landlords still describe tenant demand in their area as “strong”, despite this being down 11 percentage points year on year.
Of these, 30% said demand was “very strong” and 38% “quite strong”. Just 5% of landlords reported weak demand, highlighting the continued resilience of the rental market.
Regionally, landlords in the North East reported the strongest demand this quarter, with 71% describing conditions as strong, unchanged from Q2. The East Midlands recorded the weakest demand, though 60% of landlords in the region still characterised demand as strong.
INCREASING VOID PERIODS
The research also found a rise in void periods, with 44% of landlords saying they had experienced an empty property at some point during the past 12 months, up 7% on the previous quarter.
Pegasus Insight reckons that the findings suggest the market may be entering a more stable phase after several years of extreme pressure, with affordability constraints and wider economic conditions beginning to temper activity.
SHAPING BEHAVIOUR
Mark Long (main picture, inset), Founder and Managing Director of Pegasus Insight, says: “This slight easing in perceived tenant demand doesn’t indicate any fundamental weakness in the rental market. Demand remains strong by historical standards, but we are starting to see a shift away from the exceptionally tight conditions of recent years.
“Affordability is now playing a bigger role in shaping behaviour on both sides of the market. Tenants are more cautious about moving, while landlords are balancing rising costs, regulation and the realities of what renters can afford.
“The result is a market that still has solid underlying demand, but one that is gradually becoming more measured and sustainable.”
