The chairman of a UK property group has warned that returns from buy-to-let properties may not meet the expectations of the growing number of buyers interested in becoming landlords.

Andreas Panayiotou, chairman of property developer the Ability Group, told the Financial Times that some people are entering the buy-to-let sector without fully understanding what they are getting into.

"Investors are joining in because people say that residential is great, but they are not experienced enough," he told the paper.

With prices in the UK continuing to rise despite a cooling in the market, Mr Panayiotou suggested that letting was no longer providing the returns it once did, with five recent interest rate rises eating into investors'' profit margins.

"What''s the point of accepting a yield of three per cent when you can get six per cent in the bank? I think everything is over-valued by 20 per cent, things have been getting way out of control," he added.

However, figures released by the Council of Mortgage Lenders indicate that demand for buy-to-let mortgages continues to be strong.