Landlords with property in Outer London and the East Midlands are reporting the strongest levels of tenant demand in the UK.

This is according to research from Paragon Bank from a survey of 983 landlords. The data reveals 91% of landlords reported rising tenant demand in outer London during the second quarter of the year, with 67% reporting demand grew ‘significantly’.

In the East Midlands, 86% of landlords reported rising tenant demand, followed by Wales at 82%.

The weakest region for tenant demand was the North East, with 69% of landlords recording an increase in demand and 6% stating that demand fell during the quarter.

Overall, 67% of landlords across the UK reported increasing levels of tenant demand during the second quarter, unchanged from the first quarter and an equal record high. Only 2% of landlords reported falling levels of demand, down from 4% last quarter.

The survey highlighted that strong demand was leading to rent increases –87% of landlords said rental prices were increasing in their local market, with 51% stating that they planned to increase rents across their own portfolios within the next six months.

Landlords with properties in Wales (94%), the North East (92%), Yorkshire & Humber (91%) and East Midlands (91%) were most likely to see rent increases in their local market.

Paragon Bank commercial director of mortgages Louisa Sedgwick said: “Tenant demand shows no signs of slowing down in many parts of the country. With supply not growing quickly enough to keep pace, we are seeing rental inflation and that is likely to continue until we see demand more in balance with supply.”

General inflation was cited as the main driver for increasing rents –74% of landlords looking to increase rents in the next six months said the rising costs of running a property was the primary cause, followed by alignment with local market rents (59%).