When a development on one of London's busiest roads can sell out in hours it's a sure sign that buying property as an investment has taken off.
In theory it is a great idea. Most homes appreciate in value over the long term. House prices in some areas of London and the South-east went up by more than 20 per cent last year alone, and prices are still rising fast.
If you can find the right property at a good price, buying a place to rent out should be a great capital growth investment, plus your mortgage is being paid by someone else - and you should make extra income on top of this.
The snag is that the cheapest mortgages for almost 30 years have made home buying affordable for many people who have previously rented. So thousands of people have bought places to rent out, just as demand tumbles.
The supply and demand problem is particularly acute in London and its suburbs. Liz Eckersley, property manager at Parkgate Lettings in Richmond, says: "At the moment we have 60 properties on our books whereas normally we'd have 40 and we have half the number of tenants that we had this time last year."
She says it is now taking her 12 weeks to rent out a property, which is three times longer than normal, and she fears she may soon have to ask landlords to drop their rents.
Like many lettings agents, Ms Eckersley believes the idea of buying to let has been oversold. The Association of Residential Lettings Agents (ARLA) started buy-to-let mortgages two years ago and mortgage lenders have been quick to get in on the act: there were originally six lenders involved, now there are 42.
Malcolm Harrison, ARLA's spokesman, says buy-to-let mortgages were introduced to improve the quality of rental properties.
Although he agrees the London market is sluggish, he says the national picture is more promising. Flats in the London commuter belts and the M4 corridor in south Wales (around Cardiff, Swansea and the Bristol Channel) are renting well. And the same is true outside Manchester.
But the picture is gloomy in major cities. Betty Addison of Ryder Lettings, in Edinburgh, says she is having problems filling up luxury two-bedroom flats in the city centre.
"Most of these were bought by investment landlords because they believed this is the type of property in demand in the rental market," she says. "But what people are really looking for is student accommodation and one-bedroom flats."
Meanwhile in Bristol, Adrian Turner of Halifax Property Services reports fewer tenants walking through the door than six months ago. He believes this might have an adverse effect on the market, particularly in the short term. "I think we'll be seeing a lot more people buying rather than renting in the next six to nine months," he says.
Tyrone Silcott, of City Independent financial advisers, says property does still make a good investment, but you must be realistic about returns. "Over the long term, house prices rise, so why do you need to be reaping rental yields of 10 per cent a year on top? I'd say if you were covering the cost of the mortgage and making a 2 to 3 per cent profit a year, you should be quite happy."
Lettings agents also stress the importance of being objective and buying properties that have genuine rental potential. You may not be able to predict where the next jobs boom is going to happen, but you can always bet that students are going to need somewhere to live.
If you are going to press ahead with a buy-to-let mortgage, you need some spare capital. As an example of a good current deal, UCB Homeloans, the specialist lending arm of the Nationwide Building Society, is offering a buy-to-let loan at 5.99 per cent fixed for two years.
You have to be an existing home owner and need at least 25 per cent of the cost as a deposit. So for a pounds 75,000 property, you need at least pounds 18,750. The costs and legal fees are about pounds 1,000 (including an arrangement fee of pounds 495) but you will get back 1 per cent of the loan "cashback" on completion.
At this rate, the mortgage would be pounds 378.09 a month. Renting the property for anything over pounds 100 a week is profitable on paper, although you also need to factor-in the costs of maintenance and management and ensure you have enough money to pay the mortgage when you cannot get any tenants.
If things don't work out, it is a seller's market so you should be able to offload an unwanted property, but it can be a messy process.
Many people feel bricks and mortar is a more solid investment than shares, but the wisest investors know that once the herd arrives, it is time to move on to the next investment.
THE PROPERTY OWNER
Don Maughan,63, a sales and marketing executive, is currently designing a portfolio of investment properties in the Richmond and Twickenham area in south-west London. He says: "I am hoping to have a dozen properties by the end of the year and to get an 8 per cent return from them."
He currently has three flats without tenants, and says the market is very quiet. His most problematic flat is the most luxurious property he owns - a two-bedroomed place on Richmond Hill which is on offer for pounds 2,500 a month. "I hope things will pick up; over the long term it should prove to be a good investment."