The most excessive claims were made in London, where rents quoted to landlords were 25 per cent higher than those quoted to tenants, the mortgage lender reported.

Letting agents in Birmingham were the country's second worst offenders for inflating rental quotes, it found. There, rents quoted to landlords were 13 per cent higher than those quoted to tenants.

Trends went to the opposite extreme elsewhere. Letting agents in Manchester and Liverpool underquoted potential rents to landlords by 25 per cent and 15 per cent, respectively. In Glasgow, the gap was 7 per cent.

Lee Grandin, managing director of Landlord Mortgages, said letting agents would underestimate rents to cover themselves after they had annoyed investors by overstating them previously. They tended to inflate quotations in the most competitive markets.

Sheffield had the most 'honest' letting agents, the mortgage company claimed. Here, tenants and landlords were each given the same rental valuations. Leeds agents quoted roughly the same rent levels to each group, too.

'These results show that it is still crucially important for landlords to thoroughly research prospective properties before making any purchasing decisions,' Mr Grandin said. 'By relying purely on the advice of letting agents, some investors may be facing a serious rental shortfall, or even be put off a perfectly good property by an overly pessimistic assessment.

'Other feedback from the research indicates that extra features such as allocated parking can really boost the expected rental income.

'Investors who thoroughly research their potential investment looking for features such as these can expect higher rental income and fewer void periods.'

The National Landlords Association said that 'quite a number of landlords are happy with the advice they receive from letting agents'.

The Association of Residential Letting Agents (ARLA) disputed the survey's findings.

ARLA spokesman Malcolm Harrison said: 'The average reputable agent would not overstate the returns deliberately, because they would not stay in business.

'There is often going to be a difference between what rental values might be theoretically and what the market will offer at a given moment.'

The survey by Landlord Mortgages coincides with the latest campaign by the ARLA to have all letting agents regulated.

It follows a six-month period in which four letting agents' offices closed down, went into administration or had the principal jailed for fraud.

The association said the number of agents failing had increased in recent years because of their inexperience and a lack of training. The situation was exacerbated by a growing number of new rules affecting the rental market.

Mr Harrison said these rules were too much for many investors to understand, so it made sense for there to be properly qualified and regulated agents trained in these issues.

The government must organise this, the ARLA said.