According to research by Alliance and Leicester, 71% of buy-to-let investors see their overall prospects for 2008 as good or very good. Over three quarters of landlords claim they are making a profit out of their properties, with 22% of these able to save some of this outcome and boost their savings.

Landlords with properties in Central London believe rental yields can be as much as four time higher (44%) than buy-to-let properties in the South East of England (10%).

In other regions landlords believe that Scotland will generate a 5% increase in rental yields next year, and a 4% increase in the North. They also believe that Wales is the least likely to produce high rental yields, predicting just a 1% increase.

Jeremy Claridge, head of specialist mortgages at Alliance and Leicester, said: “It is encouraging that buy-to-let landlords indicate they are feeling buoyant about the outlook for 2008. Regardless of a tough financial year, it is clear the buy-to-let property market is still healthy for longstanding landlords, especially for those in the South East of the country.
“Our research shows that landlords believe London will produce the highest rental yields in 2008 and remain very popular as investment areas, but it is the North of England and Scotland that are expected to expand most rapidly over the next year in terms of projected net growth.”