A letting agency claims that new buy to let investors had increased the numbers of landlords, over twelve months, by 8% and stands at 1.63 million.

They have calculated that the overall net income for the landlords between 2011- 12 was £12.1 billion; however during 2012 – 13 it rose to £13.1 billion.

Government bonds and low interest rates on bank deposits is encouraging large numbers of new investors into the private rented sector to maximise potential yields on investments.

The letting agent says that in some areas of the capital it is possible to achieve between 5-6% yields from their properties.

Residential properties’ capital growth was above 7% in 2014 with certain areas in London achieving 16% for rented homes, in stark contrast the FTSE-100 only went up by  0.7% in 2014.

Stephen Ludlow, chairman of the letting agent, said: “The high yields on offer from buy-to-let investments make this asset class one of the few options for investors who want to avoid the volatility of the stock market. A fall in inflation has also calmed fears of a sharp rise in interest rates.”

Ludlow also pointed out that potential first time buyers are having to stay in rented properties longer because of rising house prices, and recent changes to mortgage procedures.

He added:  “Also, pension changes announced last year, should allow potential investors to use these funds for a property purchase, offering far greater yields than pension funds,”.