ACCORDING to the new ARLA Quarterly Index, buy to let investors can expect a return of 9.62 per cent on a rental property without mortgaging.

The return on the initial cash investment rises to 19.82 per cent when the landlord puts up a 25 per cent cash deposit, with the remainder of the purchase price financed by a mortgage.

The association’s new indices, involving a survey of more than 500 member agents, compare Buy to Let with other investment opportunities and are based on projections of six per cent house price inflation over a five year period, “... which is the likely minimum lifetime of an average Buy to Let investment,” said Tim Cannock of ARLA-registered Countrywide Residential Lettings, who recommends caution.

“There is a temptation for novice investors to buy any property which matches their budget, whatever and wherever it is. The guiding principle must always be, ‘Will this property let, and for how much?’ and the only person qualified to answer that question is a specialist letting agent."

Mr Cannock stressed: “Without expert advice, some landlords will inevitably catch a cold, yet this can so easily be avoided."