Figures from Mortgage Advice Bureau show landlords applying for a buy-to-let mortgage now have a deposit of around £100,000, 15% up on a year ago.

This represented an £13,000 increase in cash terms.

The broker firm said rising house prices had led to existing landlords refinancing or releasing equity to invest in more properties. As a result the average loan-to-value dropped from 62.2% to 56.5%.

The typical property purchased by a buy-to-let landlord in the last three months of the year was worth £230,000

Buoyed by improving finances, landlords have also been seeking shorter mortgage terms. In the last quarter of 2014 some 41% of investors took out mortgages with terms between 15 and 24 years.

Brian Murphy, head of lending at Mortgage Advice Bureau, said: “These findings show that landlords are in an especially strong position to use their recent equity gains to negotiate a better mortgage deal. House prices have settled into a steadier pattern in recent months, but the current low rate environment offers many buy-to-let borrowers the chance to reassess their finances.

“It means this part of the market is likely to see strong activity this year, both from people who are already involved with buy-to-let and others who are learning the ropes. A number of mainstream lenders have increased their buy-to-let offer already and new entrants have also arrived to boost competition.

“Lending to landlords is still a modest part of the wider mortgage market, but in terms of percentage growth, it outstripped lending for house purchases and remortgaging last year. There are certainly no signs of buy-to-let losing its appeal.”