Landlord investment in residential property has increased significantly over the past three months despite slight easing of tenant demand, research by the Association of Residential Letting Agents (ARLA) has revealed.

The proportion of ARLA members who think landlords are currently increasing their net investment in the private rental sector (PRS) by buying properties has risen sharply – from 30 per cent to 39 per cent – over the last three months, indicating that rental property is still perceived as a safe investment.

In addition to more landlords buying properties, the proportion of landlords selling their properties is also down on the previous quarter, from 15 per cent to 14 per cent, again indicating sector confidence.

Despite this positive investment background, tenant demand has actually weakened slightly in the second quarter.

ARLA’s research shows that 54 per cent of respondents said that there are more tenants than properties, a decrease from the 57 per cent seen in the first quarter.

Susan Fitz-Gibbon, president of ARLA, said: “Our research shows rental properties are still seen as a good investment option, despite the challenging economic climate. The slight slowing in tenant demand is worth noting, but the overall trend is still a continued appetite for rental homes.

“We’d urge anyone planning to let out additional properties, or landlords looking at changing their portfolio, to do plenty of research and consult with experts. It is vital to ensure your investment is properly protected – using an ARLA agent will mean you have access to Client Money Protection and a redress scheme, as well as advice on selecting the right property at the right price.”