Tenant demand on the up
The same study noted that rental yields – annual rental income as a percentage of property value – have remained at the same levels seen throughout the year at 5.6%.
The greatest number of landlords (17%) reported yields between 3% – 4%, while one in 10 said they achieved yields of 10% or more.
Yorkshire and the Humber reported the highest yields in during the third quarter (6.1%), with outer London landlords reporting the lowest (4.8%).
The East of England region performed best in terms of tenant demand, with 52% of landlords reporting an increase. This figure was just 31% for the North East – with a national average of 41% of landlords saying demand had increased.
This figure represents a strong year-on-year increase in tenant demand across several regions since 2014, with the demand in the North East having increased from 23% to 31% for example.
John Heron, director of mortgages at Paragon, said: “This research shows that yields, and tenant demand have remained strong throughout the third quarter, in common with 2015 overall. The figures reflect a steadily improving economic outlook for the UK as a whole and show that more people are actively choosing the flexibility of making a home in the Private Rented Sector.”