23% of landlords feel more optimistic about the prospects for their portfolios, according to Paragon’s Q2 Private Rented Sector Trends Report.

The buy-to-let lender also found that optimism was particularly high amongst professional landlords, with 30% saying they were more optimistic, compared with 15% of smaller-scale landlords.

On average, landlords expect to have 13.1 residential properties in their portfolios in a year’s time, compared to 12.6 properties currently. This is the first time in two years that landlords have predicted an increase in the number of properties in their portfolios.

29% of landlords have increased their rental income during the second quarter, the majority of which reported an increase of between 2% and 4%.

Landlords are also more optimistic about the net value of their portfolios, with a growing proportion expecting an increase in value (14% Q2 vs 13% Q1), and fewer forecasting declining values (12% Q2 vs 19% Q1). The majority of landlords (74%) expect net values to remain the same.

Also highlighted in the report was an interesting shift in the types of property that landlords are looking to add to their portfolios during the third quarter. Of those looking to purchase during the quarter, terraced houses are the most popular choice with more than half of landlords saying they expect to buy this type of property.

However, there has also been significant increases in the popularity of semi-detached houses (up from 28% to 41%) and detached (up from 9% to 22%).

Nigel Terrington , Paragon Group chief executive, said: “Our report emphasises the fact that there is significantly more optimism amongst landlords in the private rented sector and the buy-to-let market