The buy-to-let housing bubble looks set to burst according to a reprt by the Royal Institution of Chartered Surveyors.
The Institutes survey of the residential letting market has found the number of new instructions from landlords fell towards the end of 2007, for the first time since 1998, blaming recent restrictions on mortgage lending to would-be landlords. The credit crunch has restricted the number of buy-to-let mortgages approved, as well as the number of mortgages available to investors, say the RIC.
But in contradictory news the Council of Mortgage Lenders reported that in fact the number of buy-to-let loans went up by nearly a quarter last year, taking the number of such mortgages in existence to 1,038,000.
The CML added lending had picked up in the second half of the year, despite the credit crunch reflected in the near-collapse of the Northern Rock bank.
RIC though point out that their figures are based on just the last quarter of the year, by which time they feel mortgage lenders had started to tighten their lending criteria resulting in mortgage products for buy to let difficult to obtain..
Though banks remain cautious about offering loans, demand for rental property remains bouyant, as many would-be-buyers are unable to make the jump to home ownership.
Established investors continue to reap the benefits of the current uncertainty in the housing market and have been enjoying the fruits of rising rents.