Landlords are confident in their investment and are keen to increase the number of properties they own, according to research from a buy-to-let mortgage provider.

Paragon Mortgages revealed that after a dip in confidence at the end of last year, landlords had grown increasingly optimistic about the sector during the first six months of 2007, with the average professional landlord hoping to add another property to their portfolio within a year.

"Landlords are confident because tenant demand is strongly underpinning the market," said John Heron, managing director of Paragon Mortgages, explaining that it is "students and immigrants who are fuelling demand for rented property".

In recent weeks, concerns about interest rate rises had prompted some property experts to comment that the buy-to-let market was becoming less attractive, especially in London, as rising interest rates had started to eat into returns from rental property.

However, Mr Heron brushed the criticism aside, commenting that "rented accommodation is becoming an increasingly important part of the UK housing market" and suggesting that there are a "growing number of people who do not want the commitment of owning their own property" for whom private landlords are essential.