A year marred by economic and political instability; it is difficult to deny that 2023 was a challenging year for businesses across all sectors.
This report, covering the second quarter of 2024, picks up where the last left off, providing further evidence of private rented sector landlords having weathered the storm and facing the future with a growing sense of optimism.
Analysis of in-depth interviews with almost 800 landlords reveals:
- Average rental yields achieved by landlords have hit a 10-year high of 6.3%
- More than eight in 10 landlords report strong demand, a market characteristic evident since the pandemic
- During the quarter 85% of landlords reported generating a profit from their lettings businesses
- Falling by one percentage point since Q1, the incidence of arrears continues to broadly track downwards, decreasing by around 30% over five years
Louisa Sedgwick, Paragon Bank Managing Director of Mortgages, said: “I’m pleased to see that our second PRS Trends report of the year picks up the positive momentum of the first and highlights a number of things to be optimistic about.
“Yields that landlords report achieving have hit their highest in a decade and this is helping to sustain profitability. A likely contributor to strong yields is tenant demand, something that is elevated, continuing a trend we’ve seen for a number of years now. The research also shows a slight drop in arrears recorded by landlords, with renters now around 30% less likely to fall behind on their rent compared to five years ago, which is obviously really encouraging.
“All of this is helping landlords to feel more optimistic, and we see an improvement in confidence levels compared to the same time a year ago. Economic stability and regulatory certainty would help to boost this, giving landlords the confidence to invest in providing more and better quality homes for renters.”
Read the full report – here