One of the most positive stories to hit the buy-to-let sector in recent weeks centred around tenant demand hitting an all-time high in Q3. This headline emerged in research from Paragon Bank which outlined that almost seven in 10 (69%) landlords said they had seen demand grow in Q3 – the record high – with 36% describing this happening to a ‘significant’ level.

The South of England was suggested to be driving most of this activity. A net increase of 79% was reported by landlords in the South West and 74% in the South East, excluding London, with this metric shrinking to 59% in the North East. In Central London, 54% of landlords saw demand increase, with 16% registering falling demand, the highest of all regions in the country. However, Paragon noted that the script has been flipped from Q3 2020, when 16% of landlords in Central London saw higher demand and 58% saw lower demand.

As outlined by Paragon managing director Richard Rowntree, seasonal demand has added to already elevated levels of tenant demand and, when combined with a shortage of property in certain parts of the PRS, this is leading to rental inflation.

This represents great news for landlords and investors and when you also take into account the ever-increasing levels of competition and rising number of product options emerging across the lending community, then there is every reason to remain optimistic as we enter the closing months of 2021.