Rise in tenant demand is leading to strong growth in the buy-to-let mortgage sector, according to research.
The average rents on residential investment properties have risen "significantly" over the last three months, the figures from Paragon indicate.
Investment property values are also continuing to rise, with an increase of 2.27 per cent over the month and 7.29 per cent for the quarter, rising from £161,039 in March to £10,189 in May.
John Heron, Paragon mortgages managing director, comments: "Housing demand is growing, with more single person households, higher numbers of students as well as the effect of immigration.
Mr Heron adds that many newly formed households, such is those created by immigration, are most likely to live in rented accommodation, as the Council of Mortgage Lenders reports that 20 per cent of migrants find a mortgage within three years.
The expert adds that buy-to-let investors are actively improving their property portfolio throughout the UK.
Recent research from Nationwide indicates that as mortgage rates are increasing throughout the UK, many potential first-time buyers are renting properties as they are unable to find a mortgage.
