A study by lender Landbay looked at the buy-to-let market in the 18 years between 1996 and 2014.

It found that for every £1,000 invested in 1996 in a typical buy-to-let property, mortgaged at 75% loan-to-value, would have been worth £14,897 at the end of 2014. This represents a compound annual return of 16.2%.

The research said the same investment in commercial property in the UK would have returned £4,494 and UK government bonds would be worth £3,329. Those investing in shares would now have £3,119 while the cash value would be £1,959.

In the last calendar year property prices rose by an average of 8.3%, with typical returns rising to 18.3% thanks to increased capital gains.

John Goodall, chief executive of Landbay, said the market had changed dramatically in the past two decades but had proven an ideal investment opportunity.

“The phenomenon of buy-to-let as an asset class only goes to underline the stable personal finances of landlords,” he said. “The stability of returns shown in this paper underlines why this group of borrowers can be so attractive for lenders. In fact the history of buy-to-let can be viewed as a history of opportunity for those offering the financial backing to landlords.

“However – the bigger trend underlined here is the democratisation of such investments, which started a generation ago, and is far from complete. Buy-to-let itself is only one example of this shift. Now new models of peer-to-peer finance can give access to the returns involved in lending to such industries. Since 1996 ordinary investors have been able to be landlords, but now in 2015, ordinary investors can play the role of the bank.”