Fresh evidence from Paragon Mortgages’ latest Buy-to-Let Trends survey indicates that almost half of landlords (47%) expect that rental demand from immigrants will increase over the next few years.

Currently, respondents have an average of 3.5 non-British tenants. The professional landlord (who owns a larger average portfolio) tends to have greater involvement with non-British tenants, with an average of 4.4, compared to the small-scale landlord who has an average of just 0.5 non-British tenants.

Over the past five years, landlords have seen rental demand from immigrants increase steadily.  Six times more respondents claim to have experienced rises in demand from non-British tenants than those that have not.  Professional landlords in particular believe that demand from immigrants has increased, with four out of ten (40%) reporting a rise compared with less than three out of ten (27%) of small-scale landlords.

In terms of future changes in rental demand, 47% of landlords expect to see demand from immigrants increasing over the next few years. Again, professional landlords are more optimistic in this respect, with 23% of respondents expecting rental demand from immigrants to rise significantly.
 
The majority of non-British tenants currently tend to be migrant workers rather than students, split almost equally between EU and non-EU countries.  However, asylum seekers represent only a very small percentage of tenants housed by private landlords.

John Heron, Managing Director of Paragon Mortgages, comments:  “On the whole landlords are optimistic that tenant demand will continue to rise over the next few years, and inward migration is a key contributory factor. Over the past decade migration into the UK has increased steadily from 314,000 in 1994 to 582,000 in 2004, and with further EU enlargement on the agenda it is likely to increase even further.”

For the most part, tenancies run smoothly, with the vast majority of residential landlords reporting no problems with non-British tenants.  Of the difficulties encountered, most are attributable to communication/language problems, with difficulties over bank accounts, deposits and references mentioned in a small minority of cases.

Migrant tenants typically represent a stable, long term customer base for landlords.  One in three plan to stay for between 1 and 3 years, while 15% intend to stay ‘indefinitely’ or ‘permanently’.  Just one in eight is expected to stay for less than a year. 

John Heron continues: “Individuals coming to the UK represent an increasingly reliable source of rental income for landlords and an important element in future rental demand.”