A report by Paragon Mortgages has stated that landlords have predicted that they expect their portfolios to increase by an average of +0.8% in the next 12 months.

According to the report, this is the first time that landlords have made a positive prediction on the value of their portfolios since Q1 2007. Of the 200 landlords polled, 97% indicated they have no plans to sell any properties in the next three months and 14% have intentions to purchase investment properties in the next 12 months.

John Heron, managing director at Paragon Mortgages, said: "Interestingly, landlords have not generally seen falling house prices as the catalyst to sell property and have used weaker prices to add to their portfolios."

However, despite the positive outlook from landlords, the current buy-to-let mortgage market may restrict some landlords from purchasing any further property due to the limited availability of suitable financial products.

Heron added: "Despite strong rental demand and the availability of property at good value prices, landlords may well be frustrated in their attempts to buy because of a shortage of buy-to-let finance. There are only two lenders making any levels of buy-to-let finance available at present because of the continuing dysfunction in the money market. It is vital to the longer term health of the private rented sector that the Government considers this specialist market as well as the more politically attractive owner-occupied sector."