Buy-to-let rental yields have reached levels not seen for almost two years in January.

Paragon has published its Buy-To-Let Index for the month, revealing that the market is going from strength to strength.

According to the index, the average yield increased to 6.3 per cent, a level not seen since March 2006.

It is a slight rise on the 6.2 per cent figure recorded in December and is a clear sign that the buy-to-let market is growing in strength.

"Commentators who predicted that the current economic climate would translate into stronger demand for rented homes and higher rents are being proved right," said John Heron, Paragon''s director of mortgages.

"Since September, we have seen one of the strongest periods of rental growth ever.

"This, together with the easing of house price inflation, has translated into higher yields," he added.

Recent research from Property Hawk revealed that the average UK landlord sees buy-to-let as a long-term investment.