Buy-to-let landlords to see demand increase in 2012

After a strong 2011, tenant demand is expected to increase even further in 2012, according to predictions from one market specialist.

Research, from buy-to-let lender Paragon Group, suggests that buy-to-let insurance will be even more in demand in 2012, with over half of landlords indicating that they expect demand from tenants to either grow or boom. Only six per cent of landlords predicted a decline in demand.

These predictions compare favourably with expectations at the beginning of 2011, when fewer (45 per cent) landlords predicted an increase in demand.

Rental yield was expected to stay stable among the majority of landlords (53 per cent) with 45 per cent predicting an increase; only two per cent foresaw a decrease in rental income.

Although two thirds of landlords polled expected rent arrear levels to be stable, one in five said they thought arrears would rise moderately - highlighting the need to protect property investments with landlord insurance.

Nigel Terrington, chief executive of Paragon Group, said: "With the success of 2011 to build on, I believe the private rented sector will continue to perform and provide a valuable tenure choice for even more people in 2012."