Landlords are feeling increasingly positive about the prospects for the private rented sector (PRS) in 2012 and are looking to invest in their portfolios in the coming months, according to research commissioned by Paragon Mortgages.

The specialist buy to let lender worked with market research specialists BDRC Continental to build a picture of landlords’ planned purchasing behaviour for the next 12 months, at a time when the PRS is more heavily relied upon by a greater proportion of the population than ever before.

More than a fifth (22%) of the landlords that took part in the survey said that they expect to purchase additional properties in the next 12 months, and just 8% are considering reducing their stock. The average portfolio size in Q2 2011 was 12, which has climbed to 13 in Q3.

When asked about their current portfolios the most popular property type that landlords’ owned were terraced houses, with 65% of landlords owning at least one. This was followed by 58% of landlords owning a flat, 48% a semi-detached house and 24% a House of Multiple Occupancy (HMO).

The research also highlighted that landlords are more positive about being a landlord, with 77% agreeing to this statement and 57% rating the prospects for the PRS in the next 12 months as very good or good.

Responding to the research findings, John Heron, Paragon Mortgages Managing Director, said: “This is an interesting time for the PRS as landlords are experiencing very high levels of tenant demand as other areas of the housing market come under increasing strain.

“Looking at the year ahead, I am pleased to see that landlords are expecting to add to their portfolios as there is no sign that tenant demand is going to slow in 2012.”