Buy to let lending is predicted to increase by 25% in 2014 and reach £25 billion by the end of next year according to Mortgages for Business.

Lending to buy to let investors is now 135% higher than the £8.5bn achieved in the lean year of 2009, but remains someway below the 2007 peak of £45bn.

David Whittaker, managing director at Mortgages for Business (MfB), said: “Despite easing conditions for owner-occupiers and first-time buyers, the prevailing conditions mean the private rental sector remains a vital element of the housing mix. The growth in lending to property investors is proof of this and their intention to expand further demonstrates that demand for rental property shows little sign of waning.”

Separate research by MfB revealed that 57% of landlords intend to expand their portfolio in the next six months, particularly those who already have a high number of properties in their portfolio (11+). 54% of landlords with 1-10 properties intend to add to their portfolio, with 59% of those needing to refinance to do so, whilst 66% with 11+ are intending to add to their portfolio with 72% of these stating they will need to fund it by refinancing.

However only 7% of all landlords say they intend to shrink their portfolios over the next six months.

Whittaker said: “The appetite for expansion is large among property investors. Yields are strong, property prices are rising and demand from tenants shows little sign of slowing. As a result it’s poor that so many landlords feel lenders are not doing enough to help them. This will be emphasised even further if the Bank of England confirms that buy to let lending will be left out of the new slim-line Funding for Lending scheme.”

Over two thirds of property investors feel lenders could do more to support them with the biggest challenge that landlords face from lenders is their lending criteria, as 60% of investors feel lenders need to ease their criteria to support the market.