Reasons for the boom in house prices, particularly in the South, are many, but one possible contributor is the buy-to-let market. That is encouraged by the tax system. Private landlords get full tax deductibility, at marginal rate, of the interest paid on loans taken out to buy the property for letting. That contrasts starkly with the ever smaller amount of tax relief available through Miras on loans to put a roof over your head; it disappeared completely in April 2000.

Now a multiplicity of lenders is awash with cash to lend and many are geared to the letting market, although they each have their little quirks on criteria to lend.

The security of property is there and they are happy to fund a venture which increasing numbers of people see as extra income, some see as a significant activity and a number are starting to see as a better way of providing for their pension than traditional pension funds.

A key is the mortgage interest relief. There is also relief for all the running expenses, although capital costs, such as property improvements, will not normally get relief. If the property is let furnished there will be a deduction for the wear and tear of 10% of the rentals.

There are downsides, such as having to manage the property, find tenants and cope with matters arising, which includes the pleasures of a self-assessment tax returns as the IR will automatically send one to all landlords. However, there are agents to do most of that, and their fees are usually tax-deductible. A snag looms when you sell the property: capital gains tax.

The CGT exemption for selling the house you live in does not extend to a rented property. Bear in mind that between 10 & 40% of any sale profit could end up with the tax man, but remember that each individual has £7,200 capital gains tax allowance in any one year and that is after any purchase price has been uplifted by inflation since the purchase date.

A sting in the CGT tail is that it is not possible to "roll over" the gain from selling a let property into a replacement let property. There is an exception for holiday letting, such as a seaside cottage. Generally, holiday lets get a better tax treatment, but before you start asking your prospective tenants to bring their bucket and spades, the definition of holiday accomodation basically requires a series of short lets to different people rather than one long one. That’s a very difficult market from the 6-12 month shorthold tenancy market that most lenders are prepared to lend for.