Property investors should be very choosey about the areas they choose to buy in during 2012, Assetz has warned.

It says that low returns on savings versus strong demand for rental property will continue to drive investment in the UK buy-to-let market, but with unemployment rising and the Eurozone crisis yet to play out, taking a punt on secondary locations could prove risky.

Assetz believes that in popular residential areas where there is good infrastructure and a strong employment market, such as most of London and upmarket commuter hotspots around all major cities, buyer and tenant demand will continue to outstrip supply, supporting price growth. In contrast, areas that are reliant on manufacturing or the public sector, for example, which may be struggling with high levels of unemployment, will see relatively low transaction levels next year and a fall in values of 5% or even greater.

Stuart Law, chief executive of buy-to-let group Assetz, said: “Now is not the time to take a punt on potentially ‘up and coming’ locations