The latest Landlord Trends study from Pegasus Insight found that more than two-thirds (68%) of landlords continue to rate tenant demand in their area as ‘strong’, down 11 percentage points from last year.
Overall, 30% of landlords describe demand as 'very strong', while 38% say it is 'quite strong'. Just 5% of landlords reported weak demand, highlighting that most areas are still experiencing resilient rental interest.
Regional differences were notable this quarter. Landlords in the North East reported the highest level of strong demand at 71%, the same as in Q2, while the East Midlands recorded the lowest at 60%.
The proportion of landlords experiencing voids rose to 44% this quarter, an increase of 7% from the previous quarter.
These figures suggest the rental market may be shifting towards more stable conditions. While demand remains firm, factors such as affordability constraints and broader economic pressures appear to be moderating activity, bringing the market closer to longer-term norms.
Mark Long, founder and managing director of Pegasus Insight, said: "This slight easing in perceived tenant demand doesn’t indicate any fundamental weakness in the rental market. Demand remains strong by historical standards, but we are starting to see a shift away from the exceptionally tight conditions of recent years.
"Affordability is now playing a bigger role in shaping behaviour on both sides of the market. Tenants are more cautious about moving, while landlords are balancing rising costs, regulation and the realities of what renters can afford. The result is a market that still has solid underlying demand, but one that is gradually becoming more measured and sustainable."
