Buy-to-let market fuelled by demand.

SAVVY landlords are taking advantage of more affordable property prices and high tenant demand, according to new figures.

Buy-to-let investors are beginning to fight their way back into the property market as prospects for the sector improve following a sustained period of restricted financing and, until recently, weak rental yields. With banks finally increasing their buy-to-let lending in quarter three, a period of sustained investment in the industry is set to follow.

Many professional landlords still have liquid cash available to invest and are now likely to look to expand their portfolios over the next few months, buying property at the more affordable levels. Investments in other asset classes continue to under-perform, and as a result, city bonuses will also be ploughed into investment property, bolstering the buy-to-let sector further.

Investment in the sector will be underpinned by strong and rising tenant demand for lettings accommodation.

Phil Calderbank, director at lettingsearch.co.uk, said: "Mortgage lenders are once again recognising the important role lettings has to play in the property market and as investors with liquid cash make a move to take advantage the affordable property, strong tenant base and improving returns, I think we can safely say that the recession is now over for buy-to-let.

"Many so-called reluctant landlords have discovered a new income stream and we believe some of these people will stay in buy-to-let and even expand their portfolio. This will further strengthen the buy-to-let sector.

"The current rate of house building cannot meet the demand, and while lending to homeowners remains scarce and the uncertainty over unemployment looms on the horizon, we will see people choosing lettings from every rung of the ladder."