A third of landlords say rental demand has levelled off.

04/11/2013 By Mark Long

More than one-in-three landlords say demand in the rental sector has started to level off.
A study, conducted for the lender by BVA BDRC, reported 35% of landlords had seen tenant demand plateau, the largest score recorded since Q2 2012. Tenant demand was highest in the East of England and London.

The average rental yield across the UK also fell slightly in the last quarter to 6%. The North East was the strongest performing area with an average return of 6.7%.

Yorkshire and Humberside reported the lowest figures for both tenant demand and yield.
Additionally, landlords were experiencing more void periods than the previous quarter with 36% reporting a void in the last three months, a 3% increase on the previous quarter. The average void spell did, however, drop to 64 days.

Despite these undesirable changes in tenant demand, yield and void periods, the survey found that landlords were increasingly optimistic about the state of the wider economy. 68% of buy-to-let landlords still said they were confident in the prospects for the future.

The squeeze on spending does mean that more landlords are using their rental income to supplement the cost of living. However, confidence in the UK property market is still strong and more people are entering the market, seeing it at as long term investment rather than focusing on the short term.