The buy-to-let rental market remains in good health with low void periods, climbing yields and robust tenant demand.
Paragon Mortgages’ latest private rented sector trends report for Q3 indicates a healthy rental market.
Yields have crept up over the last three months from 6.3% to 6.4%, and landlords are confident they will remain stable at current levels.
Void periods, the average period properties spend unoccupied each year, remain at historically low levels of just below 2.6 weeks.
Tenant demand is also positive with more than half of landlords describing it as ‘stable’ and more than 40% saying it is either ‘growing’ or ‘booming’.
More than half of landlords expect demand to increase over the next 12 months, compared to 42% who expect it to remain stable.
The survey also shows an increase in young families with children moving into the private rented sector, and a corresponding decrease in young couples and professionals.
Despite this, demand for longer-term rental agreements remains relatively low.
John Heron, director of mortgages at Paragon, said: “Our latest survey data is indicative of a market growing steadily and sustainably over the long-term.
“With low void periods and steady tenant demand, which is expected to continue growing, yields remain on a gradual upward trend and landlords are confident they will continue to do so.”
Paragon's figures also show that 43% of landlords are looking to invest in terraced houses, up from 38% in the previous quarter.
The number of landlords seeking semi-detached properties has fallen from 38% to 27%