AN Oxford financial expert is recommending investors keep faith with property, despite the collapse of the buy-to-let market in some areas.

Ray Thomas, tax partner at Grant Thornton in Westminster Way, says bricks and mortar can still provide good returns.

Mr Thomas said: "Going into investment property ought to be a long-term proposition, and if investors are concerned their income will not cover their costs they should think again.

"However, the current state of the market shouldn't discourage people from investing.

"Despite the warnings about the pitfalls of buy-to-let, the tax reliefs and advantages offered by holiday lettings might just be enough to re-encourage investment in this area." Mr Thomas's comments follow recent figures produced by Bradford & Bingley which show average rental returns in Oxford have fallen to 6.25 per cent from seven per cent this time last year. Nationally, average rents have fallen to their lowest level for more than two years as buy-to-let properties have flooded the market.

Mr Thomas said many investors were over-stretching themselves.

"To add to this, investors wishing to sell their property and effectively cut their losses may face a large tax liability," he warned.

However, holiday lettings could provide tax advantages, such as inheritance tax business property relief.