One in eight purchases of buy-to-let properties was made using a deposit gifted from parents in the three months to the end of March, according to research by conveyancing company My Home Move.

It found the biggest increases in instances of landlords raiding the bank of mum and dad were in the East and West Midlands, where purchases with gifted deposits rose by 6pc and 12pc respectively. 

These areas have some of the best buy-to-let yields in the country, at between 5 and 6pc. By contrast some estimate that yields in London have now tumbled below 4pc.

While overall purchases with gifted deposits fell by 1.5pc in the three months to the end of March, investment purchases increased from 7.5pc to 12.5pc. 

While the "bank of mum and dad" is commonly behind residential property purchases, parents' impact on the buy-to-let market is less well-documented.

Parents and grandparents give their children £5bn a year to help them onto the property ladder - making them effectively the 10th largest mortgage lender in the country.

But in a new trend, many young people appear to be postponing buying their own home, put off by high house prices.

Instead they are using parental help to buy investment properties in cheaper areas to get a foothold on the property ladder and receive an income. 

Doug Crawford, chief executive of My Home Move, said: "When we talk about the Bank of Mum and Dad, people usually think of first-time buyers who are struggling to afford their first home.

"It is interesting that these investors, those who have had the deposit gifted, have made the decision to buy in areas outside of the Capital – suggesting that they either wanted to make their money go further by buying in less expensive locations, or there just wasn’t the stock available to buy in London."

First-time-buyer stamp duty trap

Many investors "let to buy" - where they buy a rental property and then release some money from it to use as a deposit elsewhere at a later date. 

However these buyers need to be aware of the stamp duty pitfall where first-time-buyers are hit by a surcharge on their own home if they own buy-to-let properties.

Since April an extra three percentage points in tax has been due for anyone buying an additional property.

Those replacing their main residence are exempt - but in a quirk of the law, those who have never owned a main residence are not.

'We might raise rents to compensate for higher tax' 

Nicole Dean, 29, a regional manager for an insurance company, bought a three-bed buy-to-let in Northumberland as an investment.

She had a gifted deposit of £25,000 from her father Nick Jarman, a shop owner, against the property which she bought for £97,000. 

It's the second buy-to-let she has bought in the area. The gift from her father allowed her to secure the larger 25pc deposit needed for a buy-to-let mortgage. 

Ms Dean and her husband, who is in the military, live in employer-provided accommodation, so bought the properties as investments in the hope that they will help them eventually buy a home of their own. 

She bought the second property in January and spent four weeks refurbishing it while on maternity leave after having son Albert last September. 

The work cost £6,000 and the property has increased in value by £25,000. It has now been let to a young family. 

Ms Dean said: "It was nice and easy. It's something we'd definitely do again as it's all gone really well.

"My dad has already offered to pitch in on another one, but now we're going to wait a while because of the stamp duty hike.

"I don't think it'll put us off completely, but we might have to raise rents to compensate."

www.telegraph.co.uk/