The warning comes after a survey by the National Landlords' Association (NLA) which revealed that the confidence amongst landlords in profiting from capital gains has trebled in the past two years.
The NLA says that landlords should be wary of relying on capital gains as the main plank of an investment strategy.
Great time for buy to let
NLA chairman Carolyn Uphill said: “It feels like a great time for buy to let as a means for additional income but people cannot rely on capital gains as a prospect for investment strategy.
“Landlords should remember this is a business for providing homes for people and is a risky investment and any capital gains are only realised when they sell property.”
Ms Uphill pointed out that house prices have been levelling off in recent months and that as the economy improves then there is a high chance that interest rates will rise shortly too.
She added: “Anyone considering a buy to let investment should think carefully before doing so which means they should plan for the long-term and look to sustainable yields not for a windfall in capital appreciation.”
The actual figures from their survey showed that the number of landlords who are confident that they will profit from capital gains has risen from 18% to 52% in two years.
Though the same survey also shows that 32% of landlords questioned feared they will not be able to meet their mortgage repayments should interest rates rise.
The first family rental project in the UK announced
Meanwhile, plans have been submitted by a developer to the Royal Borough of Greenwich to create the country's first family rental housing project.
Essential Living, which operates and develops private rental homes around the country, says it is planning to build 249 homes for permanent renting in a scheme to be known as Greenwich Creekside.
The scheme will help resolve the issues of supply and demand in London for rental properties with the entire project being for tenants alone.
Essential Living plans 5,000 strong portfolio
A spokesman for Essential Living said: “Greenwich is the perfect place for showcasing a new type of rental project around family living. We will create something to resonate with the community and raise the bar of expectation for the rental market.”
The firm also have plans to build two blocks of 150 flats in Bethnal Green and convert a 17 storey building into one hundred flats for rent in North London.
The projects are part of an ambitious bid to build a portfolio of 5,000 homes worth £1 billion for long-term renting.
