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It will be interesting to see how the buy to let sector performs over the next 12 months or so. Unlike the residential mortgage market it has never had to deal with a period of sustained house price falls.

Arguably it should perform better than the residential sector as when house prices fall people are much less likely to buy as they put off the decision to purchase. These people will still need somewhere to live so the demand for rental properties should increase.

As newbuild buy-to-let has increased hugely in the past couple of years, there is an oversupply of certain properties, especially one and two bedroom flats in city centres, but with government planning favouring high density developments, there has not been much a huge increase in the number of smaller houses.

These properties will be in short supply and we will see the rents that they generate increase accordingly. Certainly there should be no problem with a lack of demand. Another contributing factor is that new property construction has more or less ground to a halt. Terrified builders and developers have mothballed large projects as at the moment demand for newbuild properties has plunged. Landlords will be desperate for rent rises as the ones whose mortgages are maturing are struggling to remortgage.

The credit crunch has pushed rates up significantly. This has meant that for many landlords it is simply not worth remortgaging. The lucky ones are going to very generous reversionary rates like base plus 1 percentage point, the unlucky ones are going to be on SVR which for most borrowers will work out at about 2 percentage points over base.

Another effect has been the increase in rental calculations. 12 months ago landlords would have had a healthy selection of lenders offering 100 per cent rental calculation, now anyone offering a 125 per cent calculation on pay rate looks very good. The number of lenders offering buy-to-let has been slashed. Typically it was the remit of the new specialist lenders, many of whom have now either stopped lending or have had to price themselves out of the market totally while they wait for the funding markets to re open. While some of the high street lenders are attacking the market with a renewed vigour such as C&G, industry stalwarts such as Paragon have pulled back.

Those trying to remortgage face additional problems with loan-to-values coming down. Those who bought newbuild properties a couple of years ago will struggle as not only will they have lost the newbuild premium, property prices have come down and many landlords will have added substantial mortgage fees to their loans.

Many landlords will use the flagging housing market as an opportunity to expand their portfolios. The professionals will be savouring the chance to buy property at much cheaper levels than they anticipated.

Personally, I think the buy-to-let market will strive and thrive in the current climate, but only the strong will survive, the poorly researched amateurs will have lost their shirts and will end up licking their wounds while the professionals expand their portfolios and their grip on the market.

Jonathan Cornell is managing director of Hamptons International Mortgages