Large numbers of buy-to-let mortgage providers are cutting rates as landlords shy away from extra investment in the current property market so that they can tempt more business.

Usual practice dictates that prospective landlords need to ensure that the income from letting their property will cover the repayments on an interest-only mortgage at least, and the rise in interest rates in recent months has caused many to hesitate when it comes to getting into the buy-to-let market. This has resulted in a bidding war between lenders, and now some products require only 100% of rental income, such as the one offered by Cheltenham & Gloucester who have reduced their requirement from 125%. Several others have also followed suit.

Not everyone thinks that the panic to tempt investors in is necessary though, the managing director of Paragon Mortgages suggests that buy-to-let is mostly seen as a safe investment in today's climate compared to in 2003 when it was perceived to have a higher risk profile, and that landlords will simply take the increased lending rates in their stride when considering a new investment. If one also takes the inflation of house prices into consideration, it appears that landlords are benefiting from higher capital appreciation even if their rental yield is low.

Of course, this appreciation differs depending on where you chose to purchase a property to let: those lucky enough to buy in London will have seen inflation of 10.4%, whereas those in the north-east of the country will only have realised gains of 4.5%. If the overall house rice growth in the UK is looked at over the past three years it also appears that the market is on a healthy upward spiral, not heading for a crash as is widely reported.