Over eight in 10 landlords are reporting strong levels of tenant demand, Paragon Bank research has revealed.

As part of research carried out for Paragon’s PRS Trends report, nearly 800 landlords were asked about demand for their lets during the first quarter of the year. On average, the majority, 43%, said that tenant demand is ‘very strong’, with a further 40% stating that it is ‘quite strong’.

Conversely, just 1% of landlords noted ‘weak’ tenant demand, while 12% report it to be ‘average’.

The research, conducted by research agency Pegasus Insight, also uncovered regional differences in demand across England and Wales.

The highest proportion of landlords experiencing strong tenant demand was in the South West, where more than half, 54%, said it was very strong and 30% quite strong. Similar levels of demand were recorded in the North East, where 51% perceived it to be very strong and an additional 36% strong.

Yorkshire and The Humber was the region deemed to have the lowest levels of demand after 49% of landlords stated it was quite strong and 31% very strong.

Richard Rowntree, Managing Director for Mortgages at Paragon Bank says: “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. Making more homes available for tenants provides them with greater choice and is one of the most effective ways of keeping rental inflation at affordable levels.”

He adds: “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.”