Around 35% of landlords said that the number of renters looking for property is at its lowest since the second quarter of 2012.
However, that figure is very much a national average with buy-to-let demand still reported as being high in London and the East of England.
The lowest level of demand for rentable properties is found in Yorkshire and Humberside.
Despite the downturn in the number of people looking for property, landlords told mortgage lender BM Solutions, who undertook the survey, that they believed that the prospects for the private rented sector were still ‘good’.
This is despite other findings from the study which revealed that yields are falling as property prices increase and the rents tenants are prepared to pay remain static.
Yields on BTL falls
The average gross return on investment for the third quarter of this year was 6%, a fall of 0.1% compared to the previous quarter.
Again, this is a national average with landlords in the North East reporting gross returns of 6.7% and landlords in Yorkshire and Humberside saying their gross yields are now 5.7%.
Despite these figures, says BM Solutions head of sales, Phil Rickards, increasing numbers of landlords are investing in buy-to-let properties because they see them as an excellent long-term investment.
Most of those admit they are entering the buy-to-let sector in a bid to boost their pension fund and that their investing in property was safer than putting money into stocks and shares.
Mr Rickards added: “There is confidence in the UK property market.”
The survey also found that more than half of landlords, 53%, pushed up rents for new tenants with most insisting that they were raising rents to match local prices.
There is also a growing problem with voids with 36% of landlords saying that their buy-to-let was empty during the last quarter.
Buy-to-let voids fall slightly
The void rate has increased slightly by 3%, compared with the second quarter, although the average length of a void has decreased to 64 days, down by five days.
Landlords in the North East reported the greatest number of voids with the lowest incidence being reported by landlords in the South East.
However, there is good news when it comes to the number of landlords reporting that their tenants are in arrears which has now fallen to its lowest in three years.
The average rent owed by tenants is now £1,532, a drop of £358.
