Changes to tax affecting the UK's buy-to-let business have not deterred landlords in London from enjoying long term investment benefits, claim real estate firm Knight Frank.

There was a 10.1 per cent rise in the number of re-let properties in the year to August 2017, which covered new tenancy agreements and excluded extension deals with existing tenants.

The firm says landlords are re-letting their properties in greater numbers despite recent tax changes such as the extra 3 per cent stamp duty on additional homes, the loss of wear and tear allowance and a phasing out of mortgage tax relief.

Tim Hyatt, head of Knight Frank’s lettings division, said: "We see no signs of an exit. Buy to let investors typically hold properties for an average of 16 years and most professional investors will ensure their portfolio is able to weather such storms."

The firm points out that the changes have dampened demand for buy-to-let business mortgages, which has led to a 38 per cent reduction in the number issued compared to before the introduction of the additional rate of stamp duty in April 2016.

But landlords are not selling up because they value the longer term benefits of property ownership, according to Noel Flint, head of London residential sales at Knight Frank.

"The reason we are not seeing many landlords come to the sales market is because they know there is nowhere else to put their money at the moment and they appreciate that property is a tangible asset that will always be income producing," he said.

Despite growing speculation around an impending rate rise in the UK, interest rates are likely to remain ultra-low by historic standards in the medium term, which means the yields on investments such as cash or government bonds will also remain low, the report points out.

Current average gross yields are 3.2 per cent in the prime central London lettings market which compares to a yield of about 1.4 per cent on a 10 year Government bond.