There have been calls once again for Chancellor Gordon Brown to use his Budget on Wednesday (16th March) to move forward with long-awaited plans to protect and encourage UK investment in commercial property, by introducing the proposed tax-saving property investment funds - known as REIT's.

Experts estimate that the ownership of over £20bn of property assets has been shifted overseas since the start of 2004, mostly from investors looking to avoid the 4% tax on the value of onshore property investors' property.

Vijay Thakrar, a tax partner in the Nottingham office of Ernst & Young, says: "Stamp duty has quadrupled over four Budgets to 4% on gross value for all major transactions, leading to huge tax bills. Consequently large property investors are avoiding this the tax by shifting assets offshore. The Government has a real chance to halt this trend by creating legislation for PIFs that will be both workable and welcomed by the property sector."

The latest Mortgage Trust forecast, the intermediary-only lender's survey of buy-to-let brokers, shows that that despite recent evidence of a slowdown in the growth of buy-to-let lending, 68.1% of respondents believe that business will improve over the next quarter.

Intermediaries believe that landlords will continue to invest in buy-to-let, due in part to the pension reforms planned for April 2006. This will see the inclusion of residential property as a qualifying asset class in SIPPs (self-invested personal pensions).

Nicola Severn, marketing manager at Mortgage Trust said: "Although existing landlords will not be able to easily transfer their current properties into SIPPs, the prospect of capital gains in the medium term may prove to be an attractive boost to their portfolios. These factors are certain to have been considered by brokers, who continue to believe that the buy-to-let market will remain strong over the coming three months."

Landlords are continuing to buy properties for buy-to-let purposes and consequently Paragon Mortgages has reported a rise in the average size of investors portfolios for the third consecutive quarter.

The typical landlord replying to the Buy-to-Let Trends survey currently owns 13 properties, up from 11 properties last May.

John Heron, managing director of Paragon Mortgages, says: "The reticence of many potential owner occupiers to commit in the current market feeds through into stronger demand for rented accommodation."

"At the same time, in this quieter market environment, landlords have been able to negotiate particularly good deals on properties they are interested in purchasing as buy-to-let investments. The combination of these two factors means we've seen buoyant purchasing activity from them. It must be remembered that investors are dispassionate purchasers and will tend to negotiate hard on price. With this buying activity, the average size of landlords' portfolios has grown by 15% in just 9 months."

The Allsop & Co Residential Auction held on 15th February recorded over £50m, the highest result for a one-day residential auction ever. Only the two-day auction in November 2002, which raised £55.7m, managed to beat the amount raised. The success rate currently stands at 87%, but will probably rise further due post-auction sales. This result is in contrast with a slightly more subdued market at the last few auctions, and shows the renewed confidence in the residential market. Yields on ASTs and RTs fell slightly again, whilst yields on ATs surprised us by falling strongly after it had increased during the previous six auctions. The strength of the market in February was over and above what Allsop had initially expected.

Demand for rented property continues to rise, though at a slower pace, according to a recent letting survey conducted by the Royal Institution for Chartered Surveyors' (RICS).

The last quarter saw tenant demand at its lowest for nearly two and a half years, amid more stable conditions in the UK housing market. A total of 13% more chartered surveyors reported a rise in demand, down from 23% in the previous quarter.

Rents have also risen for the third consecutive quarter, with 17% of surveyors predicting that they will rise further over the next quarter. However rental returns are still expected to fall behind mortgage costs.

Jeremy Leaf, RICS spokesperson, says: "It looks like any signs of panic in the housing market are largely over, bringing stability to the lettings market. However, many people may still be wary of buying in the current climate - which bodes well for the rental market."