A considerable proportion of landlords in the UK predict that the demand among tenants for rented property is to rise over the course of the next 12 months.

This is according to research conducted by Paragon Mortgages, which suggested that 30 per cent of the landlords recently polled believed that they will see a rise in interest among property renters over the next year.

In its mortgage trends report for the second quarter of 2009, the firm also suggested that the average yield across landlords' portfolios rose from 6.2 per cent during the first three months of the year to 6.4 per cent between April and June.

However, a lack of finance remains a problem for landlords, Paragon claimed.

It found that 43 per cent of landlords stated that a lack of mortgage finance is the main obstacle to expanding their portfolios.

Managing director at the firm John Heron said: "Landlords are telling us that they want to buy new property because they recognise that yields are increasing, but the lack of available finance in the buy-to-let mortgage market is making it difficult."

Last month, Naomi Heaton, chief executive at London Central Portfolio, suggested that landlords now fear they may miss the bottom of the housing market if they hold out too long before buying properties.

Written by Mark GarnerADNFCR-2002-ID-19284006-ADNFCR

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