According to a survey by BVA BDRC and Paragon Bank, which surveyed 600 landlords, 57 per cent had good or very good expectations around rental yields.
Around half, or 48 per cent, of those surveyed had good or very good expectations for their own letting business and 47 per cent had similar expectations for capital gains.
The research found that just over a quarter, 26 per cent, of those surveyed had good or very good expectations for the UK financial market and 38 per cent reported similar expectations for the private rented sector.
The results follow record lows for all categories in the first quarter of last year due to pandemic uncertainty.
At the time 24 per cent of those surveyed reported good or very good expectations around rental yields, 19 per cent were positive about their lettings business and 15 per cent were optimistic around capital gains.
Only nine per cent were positive about the private rented sector and three per cent were optimistic about the UK financial market.
The research also showed a link between those with larger portfolios and their levels of optimism around the sector.
Around 56 per cent of landlords with 11 or more properties felt good or very good about the prospects for their own lettings business. This fell to 46 per cent for those with one to 10 properties.
Heightened optimism was also linked to purchasing behaviour, with almost two thirds (63 per cent) who have recently bought reporting a positive outlook compared to 48 per cent of respondents overall.
More than three quarters of respondents (78 per cent) who said that they planned to expand their letting business also reported positive expectations.
Richard Rowntree (pictured), managing director of mortgages at Paragon, said: “Understandably, landlord confidence fell sharply in the first quarter of 2020, as the extent of the pandemic became clear.
“It is fantastic to see optimism bounce back and rise in the time since; it is an indication of the strength of the sector. Landlords see the sector’s issues and opportunities on a daily basis so measuring their outlook can provide useful insight for the industry and, as we see here, investor confidence can have a real impact on behaviour.”