Landlords still appear to be experiencing high levels of demand for rental properties according to a survey by the specialist lender Paragon Mortgages.

During Q3 2014 41% of landlords said tenant demand was growing or booming, however 51% said in their view demand was stable with just 3% of landlords describing tenant demand as declining.

Looking ahead, 61% of landlords felt that the level of tenant arrears would remain stable over the next 12 months, compared to 12% of landlords stating that in their view tenant arrears would increase and whilst 8% expect a decrease.

John Heron, Director of Mortgages at Paragon, said: “Our latest survey of landlords reveals that that the past quarter has been a stable and steady one, with just over a third of landlords saying they feel more optimistic about the prospects for their rental portfolios.

“At this point in the year, we can usually gauge how the wider buy-to-let market has performed and what likely lending volumes for the calendar year will be. Last year, the Council of Mortgage Lenders (CML) reported total buy-to-let lending for 2013 as £20.7bn.

“Current thinking is that gross buy-to-let lending this year will be around the £25bn mark, which represents a healthy increase over 2013 - but there has been some evidence that the rate of growth has slowed as the year has progressed.”

Landlords were also asked what the most important factor is when they are looking for new buy-to-let mortgage finance. Interest rates remained the most important, having been top of the list for the past 12 months, followed by average loan-to-value and product fee.