The study, conducted for the lender by BDRC Continental, reported 35% of landlords had seen tenant demand plateau, the largest score recorded since Q2 2012.
Tenant demand was highest in the East of England and London while landlords reported the lowest interest in Yorkshire and Humberside.
Across the country, 68% of buy-to-let landlords said they were confident in the prospects for the future with the survey finding landlords are increasingly optimistic about the state of the wider economy.
The average rental yield across the UK fell slightly in the last quarter to 6%. The North East was the strongest performing area with an average return of 6.7% while the lowest, Yorkshire and Humberside, recorded typical yields of 5.7%.
Landlords were also experiencing more void periods than the previous quarter with 36% reporting a void in the last three months. This was 3% up on the previous quarter but the average void spell has dropped to 64 days.
Phil Rickards, head of sales at BM Solutions said; “The squeeze on spending does mean that we’re seeing more landlords using their rental income to supplement the cost of living.
“However, confidence in the UK property market is leading to more people entering the market, importantly seeing it at as long term investment rather than focusing on the short term.”
