While the credit crunch has made more impact on the third quarter of the year, an increasing number of landlords reported "growing or booming demand", says the Paragon Mortgages Trend.
Fifty-one per cent of landlords said rental demands are rising - double the number compared to a year ago, and the highest proportion since the survey first introduced the question back in 2004.
And with levels reportedly rising, landlords have become increasingly optimistic about the future of tenant demand. Nearly 58 per cent expect demand to grow from its current level compared to 54 per cent in Q2.
Further encouraging signs are the continuing decline in void periods, which averaged 2.6 weeks in Q3 as opposed to 2.7 weeks in the previous quarter.
John Heron, Paragon Mortgages managing director, comments: "We are now over a year into the credit crunch and landlords continue to see growing levels of tenant demand, and this doesn't look like tailing off over the coming months.
"The private rented sector is playing an important role in providing housing for those people that can't or aren't prepared to get on the housing ladder.
"We have seen that the supply of rented properties has increased as people that would have sold their home decide it rent it out instead, but where do those people then go on and live? In most cases, in rented property.
"It's important that the PRS's role in the housing mix is recognised by Government and that landlords aren't put off from investing in property through over regulation or an unfavourable tax regime."
