Landlords expect the net value of their property portfolios to increase over the next 12 months. The latest quarterly survey by Paragon Mortgages shows that landlords expect, on average, a 0.8% increase in the value of their portfolios over the coming year.

This represents the first positive prediction since the first quarter of 2007 and offers evidence that landlords believe house price falls have bottomed out, Paragon claims.

Paragon Mortgages’ Buy-to-Let Trends research also shows that landlords have been taking advantage of house price weakness since the first quarter of 2007 to add to their portfolios. Landlords owned an average of 11 properties at the beginning of 2007, which had increased to 12 properties by the third quarter of this year.

Paragon’s research also reveals that the overwhelming majority of landlords plan to retain their investment properties during the fourth quarter of the year. In total, 93% of landlords said that they had no plans to sell property during the period, with 14% stating that they intend to buy further investment property during the quarter.

John Heron , Paragon Mortgages’ managing director, said: “House prices have fallen steadily since the end of 2007 and this is reflected in landlords’ expectations for the future value of their portfolios. It is an encouraging sign that they expect the value of their portfolios to increase over the coming months.