When I bought two off-plan, new-build buy-to-let flats in the City of London, I remember swinging my 11-stone girth into a car (I was eight months pregnant) and saying to Mr Millard: “These flats are going to be great. Unless, of course, the entire City goes bust.” How we laughed. Well, yesterday that baby celebrated his ninth birthday - and last week the City went bust.

Having written a column for Home about the buy-to-let phenomenon for six years, and remained an enthusiastic landlady throughout, I will not be joining the raucous ranks of those jumping up and down on its “grave”. Do I regret being so upbeat about it? Come off it. It has been one of the most extraordinary moments in personal finance, allowing the likes of you and me to take control of our investments, rather than hand them to some distant broker or flaky pension scheme.

Anyway, I don’t believe the headlines that have appeared in the wake of the collapse of Bradford & Bingley, proclaiming buy to let dead. Far from it. In my experience, the rental market is rather healthy at the moment. My flats are full and the tenants are paying rents about 20% higher than they were nine years ago. With fewer people willing to sell, more people who can’t or won’t buy are renting instead. This means a shortage of decent rental properties, which should support rents (though there are suggestions that oversupply in some places is pushing them down). Despite the credit crunch, I have just managed to remortgage with a loan only 0.5% more expensive than the previous one.

Nevertheless, one of my tenants works for Lehman Brothers. Well, he did until a fortnight ago. Will he still be my tenant next week? Who knows? There may be many more unemployed men in suits over the weeks to come, which means that if my tenant leaves, he might be hard to replace. My new mortgage is good, but it is a tracker, not a fix. If interest rates suddenly soar, so will my monthly bill. The prospect of “no tenant plus costly mortgage” is not a happy one, but it could happen.

It is a thought that might be visiting the minds of many landladies over the coming weeks, which may, of course, cause a rush on sales. That, in turn, would mean a tumble in capital values. All of which would make remortgaging difficult, especially for those whose loans are close to the potential price of their property.

Yet I refuse to get worried. The danger zone might have widened, but in reality only for those who are vulnerable on several fronts. If you aren’t, I maintain that all will be well. First, there is the issue of “loan to value” – how much you owe the bank relative to how much your house is worth. Landlords are in the main rather cautious about borrowing: most of those who responded to a recent survey conducted by the Association of Residential Letting Agents (Arla) said they were “geared” between 51% and 75%. In other words, a 10%-20% fall in capital values, while unwelcome, wouldn’t be sufficient to send us into negative equity.

Then there’s the issue of timing. I once bought a flat, owned it for three months, then sold it on for a profit. What a lark. You can’t do that now. You have to be prepared to put your tenants in, arrange a mortgage that can be covered by the rent, then go off and do something else for a decade or two.

If you bought into the market for a quick fix, you’ll have to reorganise your game plan. Ditto if you bought in a ropey part of town where your flat is one of thousands of new-builds. If not, then keep going. If you have a nice flat, marketed professionally and mortgaged reasonably, in a well-connected, buoyant location with a large and varied local workforce, then once you have tenants in and your mortgage covered, capital values can do what they like. You won’t be thinking about selling for at least 10 years, by which time the market will have recovered. How do I know? Well, unless we suddenly veer towards communism or a barter system, it’s probable that, in a decade or so, good old capitalism will be back with a vengeance, and so will your investment. Those tenants have to live somewhere.

After all, the buy-to-let market more or less directly replaced the corporate rental market: the number of tenants out there remained reasonably stable, and there is no good reason for them all to vanish. This is not America, with giant spaces and few building restrictions. This is tightly controlled Britain, where there is still an acute housing shortage – one that’s likely to become even more acute in the next few years, as many developers have reacted to the credit crunch by slowing or freezing their projects.

Harry Johnston, a professional landlord with 40 flats in Manchester, is sitting tight for as long as it takes. I would say he is typical. “I’ll go in when the market is on the way up, not when prices are falling,” he says. He points out that he has no reason to sell up – and is rich enough to be able to freeze his rents, so his tenants needn’t panic or move out. Arla says that more than 75% of the 500 landlords questioned this summer will not sell because of falling prices. How long will they keep their portfolios? An average of 16 years, apparently.

The falling market also means there are bargains out there. It may seem distasteful, but it’s true. I’m not saying I’m rushing out with my credit card, but some are. Ooh, those cheeky landlords. Philip Stewardson, who, with his brother Mark, owns 84 residential properties across the West Midlands and Staffordshire, is taking advantage of the crisis. “We are continuing to invest,” he says. “Over the past three months, we have picked up about 10 properties, buying at 30%-40% below what was market value 12 months ago. We are extremely careful about what we buy, though. We always choose places that need modernisation and always look for hidden value – where we can increase the size or change the format somehow, say converting from a house to flats.”

That said, he and Johnston are both landlording pros, and Stewardson acknowledges that this is probably not the time for people to start a buy-to-let hobby. Nor will newbies be welcomed into the market by crippled banks that won’t countenance a mortgage unless you have a bombproof income. “It’s practically impossible for people to enter the buy-to-let market unless they can put down huge deposits,” Stewardson says. “The people I know who are doing all right have five properties or more, and are taking advantage of any opportunities.”

The reality, it’s business as usual – only with slightly whitened knuckles. For the next 16 years.

Additional reporting by Emma Wells

How it all adds up

Buy-to-let borrowers tend to put down larger deposits than owner-occupiers – an average of 29% rather than 21%, according to the Association of Residential Letting Agents . One in 10 comes up with more than 50%.

Gross investment yields on buy-to-let are back to 7%-8%, after hitting a low of 3.5% last year, says Liam Bailey, head of residential research at Knight Frank.

Just 1.1% of all buy-to-let loans are more than three months in arrears, against 1.33% in the broader market, the latest figures from the Council of Mortgage Lenders reveal.

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