The government may have spent the last few years doing everything in its power to reduce the number of people buying second homes – but that hasn't hurt the capital's rental prices, after new research suggested rents in London reached a record high in November.
The Your Move rental index showed average rents in the capital hit £1,295 a month, up 1.9 per cent on the year before – although it was relatively flat on the month before.
Across the UK, average rents hit £830 a month, up 3.9 per cent on a year ago.
The South East was the region with the strongest rises – prices jumped 13.6 per cent, to £875 a month. That was followed by the North East, where rents rose 4.2 per cent to £542.
But while rents increased in nine out of 10 regions, the South West experienced a decline in rents, with prices dropping more than one per cent to £656 in November.
New landlord rules
Landlords have been hit by a series of tax rises in recent months, including a hike to stamp duty and new rules limiting the amount of mortgage interest rate relief landlords can claim.
In November's Autumn Statement, Philip Hammond abolished estate agents' fees for tenants, saying landlords should shoulder the burden instead.
Today's research found rental yields had stayed strong despite the new rules, with the typical return edging down from five per cent last November to 4.7 per cent this year.
Yields in the capital were the lowest, at 3.3 per cent.
“The rental market is still holding strong, despite ongoing pressures elsewhere in the British economy," said Adrian Gill, director of lettings at Your Move.
“Landlords are continuing to see strong yield levels and rents are increasing, even if growth is slower than it was previously.”
“There is now a great deal of stability in the rental market and this means there is a solid platform for growth in future months.”