Research by The Paragon Group has also revealed that 55% of landlords plan to keep rents at 2010 levels, whereas 4% of landlords will reduce the rent they charge.

Nearly a third of landlords (30%) plan to increase rents by up to 4% of the current value, with 10% aiming to increase the rent they charge tenants by between 4% and 8%.

Nigel Terrington, chief executive of the Paragon Group, said: “Landlords are in a strong position because tenant demand has risen faster than supply during 2010, and that is expected to continue well into 2011.”

He added that a continuing lack of finance in the mortgage market, has forced more people to rent.

“Many of the factors that have driven tenant demand in recent years, such as positive net migration, high student numbers and people preferring to buy later in life, are continuing,” he said.

Sponsored

Your First Home: confidence to build

Sponsored by Halifax Intermediaries

Rents in the buy-to-let sector rose steadily throughout 2010, with the Royal Institute of Chartered Surveyors (RICS) reporting that more surveyors recorded rent rises instead of falls in each of the first three quarters of the year.

The latest residential lettings survey conducted by RICS has showed that 34% more surveyors expect a rise in rents than a fall during the fourth quarter.

Ying Tan, managing director of The Buy to Let Business, said: “The rise in tenant demand is very encouraging for landlords and will enable them to keep buying more properties and build up their portfolios.”

He added: “While new lenders have entered the market, it is the finance that really helps to drive it forward and charging higher rents is one of the measures that will help boost the sector.”