A survey of 200 mortgage brokers revealed that the number of first-time landlords applying for mortgages has declined since the beginning of 2002, while the percentage of remortgage and portfolio extension cases has steadily risen over the same period, according to Paragon Mortgages.

This suggests that growth in the buy-to-let market has been driven by experienced landlords building long-term portfolios rather than occasional investors or new entrants to the market. According to the Association of Residential Letting Agents (ARLA), the average buy-to-let investor intends to hold the property for 17 years, while a separate survey from Paragon showed that 93% of landlords have held buy-to-let property for six years or more.

In the three months to the end of February, brokers said four out of 10 landlords taking out buy-to-let mortgages (45%) were remortgaging, while 34% were seeking to extend their portfolios. Only 16% of buy-to-let business comes from people making their first buy-to-let purchase. This figure has declined steadily since May 2001, when four out of 10 buy-to-let mortgages were taken out by first-time investors.

Nigel Terrington, Paragon Group chief executive, said: “There is still demand from new landlords to enter the market and there opportunities remain for those investors, but professional landlords hold the majority of stock in the private rented sector and these larger scale investors account for the bulk of the new transactions.

“These landlords represent the core of the buy-to-let market – they are investors that base their purchase decisions on proven tenant demand for long-term returns rather than speculative investment for a quick profit.”