Graham Kinnear, MD at Landlord Assist, said some of the excess supply of property, caused by so-called "accidental landlords" reluctantly entering the market because they were unable to sell, had reduced significantly. This was helping to balance out the supply and demand within the rental market.
The number of properties available to rent between May 2008 and May 2009 doubled as people elected to rent out instead of sell. However, latest figures confirm that the number of available properties on the rental market has begun to stabilise.
"In the last couple of months we have seen evidence of shoots of recovery in the buy-to-let market," Kinnear said. "Indeed many of our agent clients are reporting that reluctant landlords are returning to a sales market that is at last showing signs of life."
Landlord Assist said rental income tumbled over the last 12 months on the back of over supply, which severely impacted landlord cashflow. Recent figures suggest that these falls have now stopped and that rent rises may soon be seen again.
Research suggests that the average rent is now £649 per month and that yields are on the increase too. According to property firm, LSL, the average yield is now back over 5% again, indicating that people may prefer to have their money back in buy-to-let rather than in the banks.
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