In the survey, 49% of landlords polled said the current market is attractive for investment and that they wanted to expand their portfolios. But only 27% of landlords say they’ll be able to buy more property in the next 12 months. The lack of availability of mortgage finance remains the fundamental barrier for landlords.

David Brown, commercial director of LSL Property Services, commented “2009 saw the buy-to-let market return as a viable investment. Landlords recognise this, despite the rough ride they have had to endure over the last couple of years. The average landlord made losses in 2007-8, but 2009 marked a return to form for property investment. But the availability – or lack of - of mortgage finance is holding the sector back. Even experienced landlords who are keen to take advantage of lucrative returns and improving market conditions can’t get access to the cash they need.”

A modest 11% intend to reduce their involvement in the private rental sector – a figure that includes those selling for retirement or lifestyle reasons.

Only 12% of respondents mentioned the availability of finance as a positive factor for buy-to-let investment.

Landlords’ confidence in the market is driven by their desire to maximise returns in a low interest rate environment, with a third of them attributing their positive sentiment to the superior capital returns of buy-to-let as compared with other forms of investment. In 2009, a typical landlord made a total return of 7.6% – higher than many other forms of investment.

David Brown commented: “Overall, the message is that buy-to-let is back, with the fundamentals of growing tenant demand and attractive yields once again encouraging a more positive outlook. The cloud on the horizon remains the limited availability of mortgage finance - and that needs to change.”

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