...but pundits hold firm on projected growth

The firm believes this estimated growth will be supported by interest rates dropping back to 5 per cent by December 2008.

Chief executive of Assetz, Stuart Law, said that this will be underscored by robust demand and immigration.

"While we are currently experiencing a lot of negative sentiment in the property market, this is actually no reason to set the alarm bells ringing," Law said. "If people look at the fundamentals it is actually very hard to find out what all the fuss is about.

"Buy-to-let lending will recover very strongly as underwriters realise the quality of security is significantly better than almost any other market sector. Already buy to let mortgages are now 0.3 per cent cheaper than homebuyer mortgages due to the perceived better quality of borrower.

"Rents have risen by as much as 10 per cent in many regions, higher in London, over the last year. I forecast a further 10 per cent rise in 2008. This will make almost all current property investments cash positive, even if an investor has been subsidising their mortgages in the short-term."