More than a quarter of rented homes in London are let through a company landlord as rental prices fall across the capital, a study has shown.

The proportion of homes rented out by firms nationwide reached 20% in the first quarter of 2017, in a jump of 6% from last year, according to the Countrywide Lettings Index.

In London the figure was even higher, with 27% of all let properties owned by a company.

Estate agency and property services group Countrywide, which compiled the data, suggested changes to tax relief on rental properties encouraged more landlords to buy and own homes through limited companies.

The changes, which started being phased in on April 6, 2017, mean the amount of tax landlords are able to claim back will be reduced over a four-year period to the basic tax rate of 20%.

Those who own several buy-to-let properties are most impacted by these changes and some are able to save more money by holding their homes in a company rather than as an individual.

The figures also show rents in London fell by 0.4%, with prices across Britain as a whole dropping by 0.3%, between March 2016 and March 2017.

Research director at Countrywide, Johnny Morris, said: “Companies are generally taxed more favourably, particularly with recent changes by the Government to tax relief, so in many cases landlords can make cash savings by operating through a company.

“Rents fell again in March, mostly driven by falls in London.

“Stock growth continues to outpace demand in the capital, giving tenants more negotiating power and pushing down rents.

“In much of the rest of the UK rents continued to grow, although at a slower rate.”

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