The findings of new research from Pegasus Insight show that tenant demand remains robust in most parts of the country but that it may be a turning point for landlords.
Its latest Landlord Trends report for Q2 2025 shows that 71% of landlords rate tenant demand in the areas where they are letting properties as ‘strong’ – with 33% saying it is ‘very strong’ and 39% ‘quite strong’.
Regional differences are marked. Yorkshire & Humber leads the way with 81% of landlords reporting ‘strong’ demand, 36% of them ‘very strong’, but London and the East Midlands have lower figures at 64% and 63% respectively.
While the overall figure is down from 82% in Q2 2024, only 4% of respondents selected ‘weak’ and 18% chose ‘average’ but this cooling of the market can be explained by a period of exceptionally high demand driven by low rental supply, post-pandemic migration, and sustained pressure on affordable housing, the report states.
While levels remain high by historic standards, softer demand could affect rental growth, yields, and investment appetite in some markets.
Bethan Cooke, director of Pegasus Insight, said: “Even after an 11% drop, over seven in 10 landlords are still seeing strong tenant demand, which shows just how competitive the rental market remains.
“However, the fact that demand has eased for the first time in a while suggests we may be at a turning point. For landlords, this could mean less scope for rent increases in some areas, especially where affordability is already stretched. That said, demand levels remain far above those of five years ago, and the fundamentals of the private rented sector are still solid.
“The question is whether this is the start of a sustained rebalancing between supply and demand, or just a short-term pause in the face of wider economic pressures. Either way, landlords and lenders will be watching closely.”
Read the orginal article: https://propertyindustryeye.com/easing-q2-tenant-demand-figures-might-show-turning-point-for-landlords/
