Introduction

Investment in property , or buy-to-let as it has become known in the UK, from a standing start a decade ago has become a market sector worth £94.8m in 2006, according to the Council of Mortgage Lenders. The first ever buy-to-let mortgages in Britain were introduced in 1996, and since that day more than three million of them have been written. In the process tens of thousands of Britons have become landlords and property entrepreneurs, many of whom have made significant profits from their enterprise.

A cooler investment market

In 2008 the buy-to-let market in the UK cooled.  Falling house prices and harder to obtain mortgage finance have meant that the recipe for success is no longer assured.

The reason behind the flatter buy-to-let market is two-fold. Firstly, mortgage criteria mean would-be landlords are required to have larger deposits at their disposal. Secondly, those investors who buy primarily for capital gain - in 2002 house prices rose by 21.9% nationally - are concerned because capital growth will be modest at best in 2008.

However, all is not doom and gloom for landlords as the slowdown in the housing for sale market in 2008 is meaning that well located properties are achieving good rental income growth. Also new home developers who have stock they are having difficulty selling, may well be open to offers from professional investors who have access to mortgage finance. Indeed with interest rates continuing to fall investors with tracker mortgages are in a much better position than they were a few months ago.