We have been invested in UK property for 16 years. Back in 1992, yields on corporate or multilet property were about 16% per year, and cost of borrowing was about 12% per year, and 75% LTV was pretty much the norm.

Fast forward 15 years to 2007, and yields were 6% and cost of borrowing was 6% (effective).

Here's some stats for those who think of being in this business for more than 10 years:

3 bed terraced in Ashton u Lyne - 1972 £3,250, 2006 £160,000
4 bed semi in Gatley - 1980 £28,000, 2007 £215,000
4 bed detached in Wilmslow - 1998 £190,000 2007 £575,000
2 bed terraced in Denton - 2002 £36,500, 2007 £102,000

Yes, it's true that we may be entering a period of stability or price drops, but investment in property is the sum of two components - net income from rentals, and capital growth from price increases.

Rent for a 2 bed terraced in Denton - 1998 £290 per month, 2007 £450 per month.

So much is dependent on the medium term interest rates, I don't think it matters if properties go up or down. In the longer term, they always go up just as inflation goes up. In 1972 a wage was £20 per week - now it's £500 per week. That's a 25 times increase.