By Mary Gahan BBC News Online business reporter

Orla Ryan thought she would have no problem renting out her flat when she accepted a job overseas.

A few years ago we always used to look at a 10% return and you would be lucky to get 4-5% now

Peter Burchell, estate agent

But to her astonishment, the estate agents near her home in south-east London "didn't really want to know".

The reason? Their books are already full of two-bedroom flats.

This glut, in some parts of the country, is good news for tenants because it is keeping rents down.

But it is bad news for the people who decided to pile into the buy-to-let market to make money.

Diminishing returns

Peter Burchell, a director of Peter James estate agents, says there are still plenty of people looking to rent, but they have a fair amount of choice.

"Around the two-bedroom market I would say prices have dipped.

It's taken me four months to get another tenant

Jane Adams

"A year ago we were getting �800 a month, now it's �725 to �750."

He says many of the buy-to-let owners have unrealistic expectations and they ring the estate agents almost daily, demanding to know why their flats have not yet been let.

"A few years ago we always used to look at a 10% return and you would be lucky to get 4-5% now.

"I have seen it gradually go down over the years."

A mortgage and no rent

Mr Burchell says that the "professional buyer or investor" understands what is happening to the market and realises he has to drop the rent to get a tenant.

Burchell: flats are being offered for sale or rent

But he says many of the new buy-to-let investors demand high rents to cover their mortgages.

And they do not seem to understand that if the property is left empty for several months, while it is advertised at the higher rent, they will lose even more money.

Jane Adams knows what it is like to have an empty house, no rent coming in and a mortgage to pay: "This year it's taken me four months to get another tenant.

"My house, it turned out, was not the sort of thing people were looking for."

Tenants wanting to rent in South Devon were turning their backs on her three-bedroomed Victorian house in favour of smaller cottages.

Ms Adams has had to drop her rent from �800 a month to �750.

Better than the stock market

Even with a lower rent, the increase in house prices since she bought the property three years ago means that she should make a substantial profit when she comes to sell.

But, she says, it has not been easy.

It's still probably sustainable to buy to let

Christian Darkin

"The refurbishment time was hard work and this year has been nerve-wracking, spending four months trying to get a tenant during which time I have had to pay the mortgage.

"You end up hating it and saying: 'I wish I'd never bought it'.

"Weeks go past, you phone the agent who says: 'No, I haven't shown anyone around' or: 'Yes, I have shown someone around but they didn't like it.'"

As an investment, though, the house has been far better than the stock market.

"My financial adviser has just rung me to say my pension has gone down by 3% - so although I've had to sweat a bit with the house it's been worth it," says Ms Adams.

'Silly rises in prices'

In spite of warnings about the buy-to-let market drying up, Christian Darkin decided to plunge in this year.

As a self-employed freelance writer he decided it would be better to carry on living in a shared, rented flat rather than taking on a big mortgage.

More choice for tenants

But he thought that buying to let would be a good way of getting on the property ladder - and the mortgage would be covered by his tenants' rent.

He bought a flat which needed repair and redecoration - and then had it revalued.

"Because of the very silly rises in prices of property it was worth about �12,000 more, so I decided to sell it."

Now Mr Darkin is looking for another flat and is not put off by warnings that rents are falling.

"Overall I think that it's still probably sustainable to buy to let; I'm going to do it in the future," he says.

Finding the hot spots

There is still plenty of interest in buying to let, according to Malcolm Harrison from the Association of Residential Letting Agents.

Christian Darkin: will try again

"It's a very fluid market - it's a question of knowing your local market and knowing how it works," he says.

But he warns: "Last week's hot spot is going to be this week's cold spot.

"I heard that Truro was the hot spot last month but I'm not prepared to say it is this month."

And there is evidence that buy-to-let is losing its appeal for some owners.

Peter Burchell of Peter James Estate Agents says: "We're finding that more and more people are now putting their property on the market to sell or let and they take whichever deal comes first."