According to Jones Lang LaSalle’s latest ‘London Residential Heat Maps’, rents across London’s residential sector have increased by 6.1% in the past six months from £37.87 per sq ft to £40.20 per sqft.

The biggest growth in rental yields occurred in Paddington (71.6 basis points), West Hampstead (64.3 basis points) and Chiswick (53.7 basis points). Comparatively, average asking prices have grown just 2.2%, rising from £718 per sqft to £734 per sqft.

James Thomas, Head of Residential Development and Investment at Jones Lang LaSalle, said: “Over the past 6 months the London residential market has witnessed rental growth escalating faster than capital growth. The market continues to be undersupplied with quality rental stock for the young professional market, while access to the debt market for first time buyers remains limited preventing many would be purchasers getting onto the property ladder.”

Thomas continued: “Paddington, West Hampstead and Chiswick all benefit from excellent transport links and are well buffered from void periods so will offer encouraging returns for buy-to-let investors looking for increasing income streams.”

The greatest yield compressions (led by capital growth and weaker rental growth) were found in Vauxhall, Greenwich and Clapham.