A new ‘landlord sentiment’ survey by LSL Property Services, parent company to Reeds Rains, Your Move and the former Halifax agency offices, says that nearly half (49%) of landlords think it is a good time to invest in more property.

The landlords are also unworried by the prospect of rising interest rates, saying that they would need to rise 3.25% on an average buy-to-let tracker mortgage to exceed current rental income.

Nearly seven in ten landlords (68%) expect rental demand to grow in the next year.

However, 54% are finding mortgage finance harder than a year ago and cite it as their biggest obstacle.

Of those landlords who have bought in the last year, 48% were cash purchasers.

With 185,600 fewer first-time buyers entering the sales market in the last 12 months than in normal years, over half of landlords have seen a rise in tenant demand in just the last three months.

David Newnes, estate agency managing director for LSL, said: “Optimism among landlords is not only buoyant, but increasing. Soaring rents and climbing demand from frustrated first-time buyers are not only making buy-to-let an attractive proposition for new property investors – but are encouraging existing landlords to grow their holdings before property prices increase once more.”

The latest LSL Buy-to-Let Index showed that rents now equal their all-time high of £692 per month.

As a result, landlords with mortgage finance have an average of £274 in rental income a month after mortgage payments – or £3,288 per year.

This means that even if interest rates increase by 3.25%, landlords’ current rental income would be big enough to absorb the increase in the cost of a tracker mortgage on the average buy-to-let property.

Newnes said: “Landlords are taking a healthy sum once the mortgage has been paid each month. Many are taking the opportunity to either pay down their mortgage or expand their portfolio – or are using the opportunity to build slush funds for rainy days or future higher mortgage costs.

“With the Bank Rate forecast to remain below 2% until at least the end of next year, landlords can expect to see rental payments rise without facing the burden of higher mortgage payments.”

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If attitudes become reality, the shape of Britain’s housing market will be fundamentally changed within a generation.

According to the research into the attitudes and behaviour of young people towards home ownership, 77% of all those who do not own a home still aspire to owning one.

However, despite this aspiration, nearly half of 20 to 45-year-olds say Britain is becoming more like Europe where renting is seen as the norm, and predict that Britain will become a nation of renters within the next generation.

Produced by the National Centre for Social Research, the report analysed the results of a survey of 8,000 20 to 45-year-olds and identified the emergence of ‘Generation Rent’: two-thirds (64%) of non-home owners who believe they have no prospect whatsoever of buying a home.

The perception that banks are not lending, the size of mortgage deposits necessary, and a fear of the application process has prevented ‘Generation Rent’ from making any significant attempts to buy a home.

According to property group LSL, parent company to Reeds Rains and Your Move, landlords in March increased rents by 0.4% compared with February.

It was the second consecutive month rents have increased.

The group also reported that 9.4% of tenants are in arrears with their rents. Total unpaid rent came to £224m in March, the group estimates.

Regionally, rent rises differed. The greatest monthly increases were in Eastern England, where they rose 2.2% and the South-East where rents increased 1.7%. However, on an annual basis, London is powering ahead: over the course of the last 12 months, rents have soared by 7.3%. The South-East is close behind: rents there have increased by 6.7%.

The biggest monthly decreases were in the South-West, where rents fell 1.6%, and the West Midlands, where they dropped by 1.3%. Smaller monthly decreases also occurred in Wales and Yorkshire and the Humber.

Over the course of the past year, across England and Wales, only the South-West and Wales have registered annual falls in rents – by 2.4% and 1.5% respectively.

LSL said growing rental demand continues to outstrip supply, with most would-be first time-buyers staying in rented accommodation for nearly a decade.