The findings from Paragon Mortgages revealed that 41% of landlords said that demand was growing while 51% said demand was stable.
The Private Rented Sector Trends survey has been undertaken for the past 13 years and monitors landlord confidence and gathers their views on the buy to let sector.
Rents will remain stable
When questioned about the level of tenant arrears they would expect to see over the coming year, 61% of landlords said arrears would remain stable while 12% said that the arrears would increase. Just 8% of landlords said tenant arrears would fall.
John Heron, a director of Paragon, said: “The landlord survey reveals that the past quarter has been stable and steady with just over a third saying that they are feeling more optimistic for the prospect of their rental portfolios.”
He added that the survey is also a way to gauge how the buy to let market has been performing and what the likely lending volumes for the coming year are going to be.
Mr Heron said that last year the total buy to let lending predicted by the Council of Mortgage Lenders was expected to be £20.7 billion.
He said: “The current thinking is that buy to let lending this year will be around £25 billion which is a healthy increase over 2013 but there is evidence that the rate of growth is slowing as the year progresses.”
Important factors for buy to let mortgages
The survey also questioned landlords about the most important factors they look for when taking out buy to let mortgages.
Landlords say that interest rates are the most important factor, an issue that has now topped the list for the past year, followed by the average loan to value ratio and the buy to let product fee.
The survey's findings underpin those from estate agency Sequence which found that demand for rental properties has grown by 18% over the past year with the supply of properties in decline.
Sequence says that there are now seven tenants chasing every available rental property which in turn is pushing up rents across the country.
Outside of London, the average rent is now £697 a month, up from £670 a year ago. In London, tenants have seen rents increased by 6% to an average of £1,515 a month.
Number of tenants in serious arrears falls
Meanwhile, the latest figures the Tenant Arrears Tracker, compiled by LSL Property Services, reveal that the number of tenants in serious arrears has fallen by 9% in the past year.
The survey also reveals that 99% of tenants in the private rental sector now avoid significant rent arrears – a fact reflected in the number of court orders for eviction which are down by 16% in the past quarter.
