Sixty per cent of buy-to-let (BTL) landlords are "optimistic" about the performance of their property investment in the next year, both across capital growth and rental returns, Butterfield Mortgages Limited (BML) has found.

The firm’s research revealed that over half of BTL landlords surveyed (57%) said the Bank of England’s interest rate cut in August had had a positive effect on their investments.

Meanwhile, 58% believe that BTL investments remain "highly attractive" in the current climate.

When asked about their investment strategies over the next 12 months, BML found that 38% of landlords will increase the size of their portfolios, while 49% will look to maintain their current portfolio size.

However, 10% said they will reduce the number of properties that they own.

The mortgage provider’s research also revealed that over half (56%) of landlords believe that the "predicted exodus" of property owners from the BTL market has been "greatly exaggerated".

Chief executive officer at BML, Alpa Bhakta, said that although the BTL sector has faced "considerable challenges" in recent years, these findings show that landlords "remain eager to invest in the UK rental market".

She added: "The sector’s resilience can be attributed to two key factors: strong rental income and steady capital growth. Encouragingly, both of these indicators have shown positive momentum in recent months, suggesting that landlords’ appetite for investment will continue to grow as economic conditions improve."

Despite this optimism, Bhakta stated that lenders and brokers should look with caution towards the Autumn Budget and be mindful of the challenges ahead as they invest across the rest of the year.

Bhakta concluded: "Additional taxation and regulation are likely to be introduced, so landlords will need ongoing support and tailored guidance to navigate any new hurdles that arise.

"Flexibility and bespoke solutions will be critical to the sector’s success going forward, so brokers and lenders need to collaborate to ensure borrowers have access to the financial products they need to thrive in the latter half of this year."

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