Low investment yields coming from stagnant rents and property prices are squeezing profits for landlords – with those in London suffering the worst.
Although rents are still rising across the country, October’s report 1.3% increase means the figure has sat at the same rate since May, says the Office for National Statistics.
The rise means a tenant pays an extra £6.50 a month on rent priced at £500 a month in September 2018.
And that’s an average indication of how rents are moving – with some landlords gaining more and many coping with smaller increases.
The latest rent analysis from the ONS shows the biggest annual increase was in the South West, where landlords have seen a rise of 2.3% year-on-year, those in London experienced a meagre 0.9% hike.
The next best regions for rent growth were Yorkshire and The Humber (up 1.8%), the East Midlands (up 1.7%) and the South East (up 1.6%).
The lowest rent gain was in the North East, with a rise of just 0.6% for the year.
Stripping out the figures for the capital, rents across England, Wales and Scotland were up an average 1.5% in the year to the end of September, says the ONS.
Average UK rents have risen 8% since the ONS started tracking changes in September 2015.
London landlords were hit with a double whammy.
Not only are rents rising slowly, but average house prices dropped 1.4% over the year to August.
The average home in the capital is now worth £472,753, compared with £479,465 a year ago.
Nationally, house prices moved up a little – by 1.1% in England to £251,233 and 4.5% in Wales to an average £168,318, the ONS study shows.