Tenant demand continued to climb during the third quarter of the year, according to research by Paragon, the leading provider of buy-to-let mortgages. Their Private Rented Sector Trends Report for the third quarter shows how four out of ten landlords (44%) said tenant demand increased and just 4% said it declined. Almost half of landlords (49%) said they expect it to continue rising.

The report also revealed a shift in the type of properties that landlords are looking to purchase. Terrace houses were the most popular choice at 41% followed by flats (35%) and then bungalows - which have surged in popularity from 2.7% in Q2 to 10% in Q3.

Chief Executive of Paragon, Nigel Terrington, commented, "Tenant demand has continued to increase for a third quarter, which is perhaps not surprising considering the current squeeze on the UK housing market as a whole".

"More people than ever before are relying on the private rented sector, so it is positive to see that landlords are looking to invest in their portfolios and are also diversifying the types of property in which they are investing in order to meet tenant demand."