Strong demand pushes rents up

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High levels of demand mean that the rents landlords can charge on their properties are steadily increasing, an industry expert has revealed.

Yesterday (September 11th) both Arla and Rics published studies which indicated that a slowing housing market, higher borrowing costs and the uncertain outlook for house prices all meant that demand for private rental accommodation was at an all-time high.

Now, Paragon has explained that this demand has put an upward pressure on rents.

The buy-to-let lender's study found that landlords are planning on increasing the size of their portfolio over the coming months - from 11.5 to 12.1 properties.

Furthermore, typical rents have increased by an annualised rate of 12.7 per cent - reaching £10,914.

"There is broad agreement that buy-to-let is a beneficiary of a softer housing market, aswould-be homebuyers defer house purchase and find themselves competing with migrants, students and first jobbers, among others, for a finite supply of rented homes," explained Nigel Terrington, chief executive of Paragon.

"The private rented sector continues to expand steadily to meet this growth in demand for accommodation and landlords add to their portfolios in the knowledge that tenant demand is buoyant and rents continue to rise."

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