WITH house prices continuing to rise and rents slipping in some areas, questions are being asked in some quarters about the future of buy-to-let as an investment.

John Hards, national operations director of Countrywide Residential Lettings, said: "There is certainly evidence that the sector is over-subscribed in some areas and we are seeing some rationalisation there, for example in London, but the overall picture remains positive.

"It is worth remembering that what investors lose on yield, they are gaining in terms of capital growth. As long as they buy wisely, with appropriate professional advice and are able to cover their costs with a margin for void periods, the right property in the right location continues to represent good medium to long term growth potential."

Property is, he admitted, cyclical.

"We did see rental adjustments in some areas following 9/11; but feedback from our own 60 offices indicates that demand is rising again, and rents are likely to follow as any surplus properties are absorbed.

"It would be very unwise to underestimate the genuine demand for quality rented accommodation," he warned.