The south east and greater London have the strongest levels of tenant demand but northern regions provide the best yields, BM Solutions has claimed.
The firm’s quarterly index highlighted Yorkshire and Humberside, Scotland, and the North East as areas where buy to let yields are highest.
More than 1,000 National Landlords Association members took part in the study and levels of optimism regarding the UK’s economic outlook have also increased.
Compared to 12 months ago when 28 per cent of landlords were optimistic about the future, that figure has now risen to 37 per cent.
Ten per cent of landlords revealed that demand rose significantly in the last quarter, a similar proportion to what was noted in the previous quarter.
Tenant demand was at its highest in the south east and greater London, where two in five suggested it was rising.
That compares to the North East where demand for buy to let property was perceived to be weakest, despite the strong yields in nearby Yorkshire and Humber.
This region provides average yields of 6.8 per cent compared to 5.3 per cent in central London and five per cent in the area immediately outside the capital.
Growth is expected across the buy to let market according to the index, with 27 per cent of landlords planning to increase their portfolios in the next 12 months.
Meanwhile, 16 per cent of landlords plan to add buy to let property to their portfolio before the end of 2014.
“With the latest official figures showing a degree of uncertainty creeping into the outlook for the economy as a whole, the future looks optimistic for landlords,” said Phil Rickards, head of BM Solutions.
“Many are reporting increased tenant demand and more than a quarter are planning to expand their portfolios.
“There is further evidence of a north south split, with tenant demand greatest in the south east and London, whereas the greatest yields are to be found in Yorkshire and Humberside, Scotland, and the North East.”