Landlords continue to remain positive about the buy-to-let market, Paragon Mortgages has said.

The specialist buy-to-let lender’s quarterly PRS Trends survey findings show that 41% of landlords are more optimistic about prospects for their property portfolios, with large-scale landlords showing a higher level of optimism (43%) than small-scale landlords (33%).

Despite a slight reduction in the average portfolio size over the past three months, confidence in the market remains strong with landlords expecting to see an average net increase of 5.6% in property investment over the next 12 months.

Landlords are particularly positive about current levels of tenant demand, with 36% saying that this is either growing or booming. This figure is up by 2% since Q4 2013, whilst the proportion of landlords saying that tenant demand is falling has reduced slightly by just 1%. Looking forward, 37% of landlords expect tenant demand to increase in the next quarter, which is a 5% rise on the figure recorded three months ago.

John Heron (pictured), managing director of Paragon Mortgages, said: “We have seen a steady improvement in confidence among landlords over the past year as the housing recovery has gathered pace.

“Whilst market data would suggest that we are a long way from ‘boom’ territory, this optimism among landlords is key to maintaining balance in the housing market and in ensuring that renters’ have more choice.

“To support this we need to continue to see the sort of progress that we have seen from buy-to-let lenders over the last year with further measured and responsible development of products and criteria.”