Research by specialist buy-to-let lender Paragon Group has revealed that landlords are expecting tenant demand to continue to boom this year.



More than half (56%) of the landlords who took part in the lender’s latest quarterly survey said that they expect tenant demand to either grow or boom, compared with 45% who were asked the same question at the end of 2010.



Only 6% of those questioned thought that tenant demand would decline this year.



When asked whether they thought rental income would increase during the next 12 months, 45% of landlords surveyed said it will increase, whereas 53% said that it would remain stable – and only 2% said that it would decrease.



Two-thirds of landlords believe arrears levels will stay stable and 20% expect arrears to rise moderately.



Nigel Terrington, chief executive of Paragon Group, said: “It is no surprise that landlords are expecting a healthy level of tenant demand.



“With the success of 2011 to build on, I believe the private rented sector will continue to perform and provide a valuable tenure choice for even more people in 2012.



“This year will bring its own challenges, especially with the uncertainty in Europe and the wider financial markets affecting overall confidence levels. But I believe that the foundations that we laid as a sector in 2011 will allow lenders and landlords to continue to do business.”