It warned that, given rising unemployment and continued uncertainty regarding the eurozone, buying property in secondary locations could be high risk.
Assetz recommended that investors stick to popular residential areas where there is good infrastructure and a strong employment market. This includes most of London and upmarket commuter hotspots around all major cities, where it says buyer and tenant demand will continue to outstrip supply, supporting price growth.
The specialist urged investors to avoid property in those areas that rely on manufacturing and public sector employment, where job losses are most likely, and where it reckons property values could drop by 5% or more.
Stuart Law, chief executive of Assetz, said: “Now is not the time to take a punt on potentially ‘up and coming’ locations or those that are dependent on sectors which are at risk from high levels of unemployment.
“The deepening eurozone crisis is far from over and it will no doubt continue to impact the property market here in the UK by limiting the amount banks are able to lend and stifling consumer confidence.”
He added: “High levels of tenant demand and the lack of first time buyer finance will continue to underpin the market next year, with rent rises expected in the region of 5%, as increasing numbers of people turn to buy to let as a way to generate a decent income from their cash.
“Buying in a strong location will help deliver a reliable rental income and a good supply of quality tenants, albeit alongside only modest capital growth for the time being.”