Our refreshed PRS Trends Report offers an encouraging update on the private rented sector. Landlords are seemingly buoyed by continued strong tenant demand and signs that the business environment is improving as part of a broader economic recovery.

PRS Trends tracks many metrics important to landlords, including buying and selling intentions, tenant demand, profitability and rent arrears and voids, amongst others.

For this edition, covering the first quarter of 2024, we drew on responses from in-depth interviews with almost 800 landlords.

The report reveals:

• More than eight in 10 landlords (83%) report strong tenant demand, with 43% saying it is strong and 40% very strong
• Average rental yields achieved by landlords have improved during the past 12 months, rising from 5.2% in the first quarter of last year to 6.1% in Q1 2024
• While landlords are understandably uncertain about the outlook for the UK economy, their confidence in their own lettings business has seen a significant uplift since the Q4 2022 mini-budget
• Despite increasing by two percentage points, from 27% to 29%, since last quarter, the proportion of landlords who have experienced tenants in rent arrears has decreased by around 20 percentage points over the past five years

Richard Rowntree, Paragon Bank Managing Director of Mortgages, said: “PRS Trends reflects the general mood at the moment – growing but cautious optimism. Despite the economic instability we’ve faced, we see many lettings businesses in safe hands, with landlords astutely managing portfolios to remain profitable, something that is important if they are to continue to provide an essential societal function – good quality homes for a varied population of renters.”