Landlords have been snapping up more properties in the last quarter than in the previous three months, says the Association of Residential Letting Agents (ARLA).

In the ARLA Members’ Survey of the Private Rented Sector (PRS) for the second quarter of 2009, nearly twice as many ARLA members reported that landlords are buying more properties.

ARLA members also reported that that the dramatic interest rate cuts of late last year are beginning to bear fruit for the PRS: half (50%) say that they think the cuts are tempting investor landlords back to the market because of the minimal interest to savings rates.

The rise in buy-to let activity could be as a result of increased average weighted rental returns too: houses are up substantially from 4.8% to 5.1%. Flats are also up from 4.9% to 5.0%. Unsurprisingly, rental returns for houses in Prime Central London were far lower than the national average at 4.7% but returns for flats remained consistent across the UK.

Ian Potter, Operations Manager of ARLA, said: “Each quarter we glimpse a bit more activity as the bargains get snapped up and confidence is restored in buy-to-let as a viable long-term investment vehicle, particularly if the returns are rising too.

“The Government has started to look at the PRS a bit more closely, recognising just how important it is to the property market as a whole. Some initiatives – such as the interest rate cut – appear to be having an effect albeit indirectly but there’s still a long way to go to. However it is fair to say that these signs are encouraging and I’m hopeful that this may mean that we’re starting to see the bottoming out of the market.”