114x114_fitbox-tos_sold_board1.jpegA new study of the residential property investment market reveals that almost a third of property investors have been landlords for a year or less. This is no bad thing of course, but could mean that novice investors may be less adept at budgeting for interest payments on newly acquired properties, says Sq Ft.

Although rental income is driven down by supply, over half of landlords polled say they hope to acquire more properties this year.

Adrian Turner, chief executive of the Association of Residential Letting Agents (Arla), said: "Buy-to-let property investors are starting the new year in an optimistic frame of mind. Private individuals have taken over as the main drivers of the sector and it is clear that they are here to stay."

But with rental yields hitting a five-year low of 5.74pc in 2006, Landlord Mortgages, a specialist buy-to-let broker, says recent buyers of rental properties face an income crunch as short-term discounted mortgage deals revert to higher variable rates.

Buy-to-let mortgages with rates as low as 3.99pc are tempting new landlords. But after the expiry of incentive periods, the cost of loans typically rise to well above the average rental income yield.

Lee Grandin, managing director of Landlord Mortgages, said: "While falling rental yields are not great news for investors, the decline results from the very healthy capital appreciation they have enjoyed over the past five years."

But Arla says most buy-to-let investors have been landlords for three years or less. More than 20pc have been in the market for less than a year, suggesting they have benefited little from recent rises in house prices.

Adrian Turner ripostes: "This new breed of landlord understands that residential property investment can, and must, take account of the ups and downs of the sales and the rental cycles. They are not spooked by scare headlines about housing."