According to Paragon Mortgages, nearly 50% of landlords reported an increase in tenant demand during the three months to the end of March, up from 40% who saw a rise in the final quarter of 2010.
The group said it was the seventh consecutive quarter during which the proportion of landlords who said demand had increased had risen.
Over 50% of landlords said that they expect the number of people looking to rent a home to grow during the next 12 months.
Around 64% of landlords said they thought the availability of buy-to-let mortgages had remained limited during the first quarter.
Nigel Terrington, chief executive of Paragon, said: “Landlords are experiencing high levels of tenant demand, and this is expected to rise due to a number of factors, including social housing reforms, lifestyle choices, low numbers of first-time buyers and wider demographic changes.
“We are seeing evidence that strong tenant demand is feeding through to higher rents. A lack of available mortgage finance is restricting the sector’s ability to expand and needs to be addressed to create a healthy and vibrant buy-to-let market in the UK.”
But despite the problems in obtaining mortgages, 23% of landlords said they felt optimistic about the performance of their portfolios, with the average landlord currently owning 13 properties.
