New research unveiled by Paragon Bank sheds light on the prevailing dynamics within the rental market, indicating a significant 83% of landlords reporting robust levels of tenant demand. The findings, drawn from Paragon's PRS Trends report, reflect the sentiments of nearly 800 landlords surveyed during the first quarter of the year.

The data reveals a nuanced spectrum of responses, with 43% of landlords describing tenant demand as 'very strong', and an additional 40% characterizing it as 'quite strong'. Conversely, a mere 1% of respondents noted 'weak' tenant demand, while 12% considered it 'average'.

Regionally, disparities in demand emerge, with the South West boasting the highest proportion of landlords experiencing strong tenant demand, where 54% classified it as 'very strong', and 30% as 'quite strong'. In contrast, Yorkshire and The Humber exhibited the lowest levels of demand, with 49% of landlords citing it as 'quite strong', and 31% as 'very strong'.

Richard Rowntree, Managing Director for Mortgages at Paragon Bank, emphasized the ongoing need for investment in the rental housing sector, stating, "Although recent reports have pointed to an improvement in stock levels within the private rented sector, this research is evidence that investment in rented homes is still very much needed as demand still outweighs supply."

Rowntree underscored the importance of maintaining a balance between supply and demand to mitigate rental inflation and ensure affordability, adding, "We can only see tenant demand levels growing, fuelled by forecast population growth and household formation over the next decade. Rental housing supply needs to keep pace to ensure those who want or need to rent a home have a choice of property at a reasonable price."