Paragon Mortgages’ Trends research shows that the average value of landlords’ portfolios rose by 6.1% during the first quarter of 2010 to £1.52 million.

The rate of growth in portfolio values accelerated during the quarter and was up from the 4.2% growth recorded during the final quarter of 2009. The figure takes into account both changes to property values and sales and acquisitions, which Paragon says suggests that landlords have been adding property to their portfolios or replacing existing stock with properties of higher value.

This is the first time that portfolio values have increased for two quarters in succession since the first half of 2008 – a period when house prices were starting to slip but buy-to-let mortgages were still widely available and landlords were able to finance purchases.

Looking forward, landlords expect the average value of their portfolios to be 1.2% higher at the end of the first quarter next year than at the end of the equivalent period this year. 73% of landlords believe that values will be stable over the period, but of those forecasting movement, 19% believe values will rise compared to 8% who forecast a fall.

John Heron , Paragon Mortgages’ managing director, said: “Confidence amongst the landlord community has grown in recent months and that is reflected in portfolio valuations. According to the National Landlords Association