Its index found that average buy-to-let mortgage rates had fallen by an average of 0.3% in the last three months.

It said that new products from lenders including as TMW, Santander and Mortgage Trust had helped force rates down across the market.

London remained the most popular location for property investment but the highest yields were found outside the capital city with Leeds, Nottingham and Southend-on-Sea all returning more than 7% to investors.

Across the whole country rental yields remained relatively flat at 6.22%. The average loan size shrank to £162,229 in the second quarter while the average LTV also fell to 73.9%.

Andy Young, chief executive of TBMC, said:

“Since the beginning of the year average fixed rates have been lower than variable rates with attractive rates available across all LTV bandings.

“The sustained fall in fixed rates over the last six months may be attributed to the impact of low swap rates and UK fiscal measures. However, the significant increase in swaps at the end of June may affect this trend over the rest of the year, with some industry pundits asserting that fixed rates may have bottomed out.”