Knight Frank says the supply of new lettings properties in prime central London is likely to slow – and as a result, rents are increasing.

The agency says its evidence for the reducing supply is that the number of homes it has valued for rent dropped some four per cent in the year to September.

It says this suggests the number of so-called accidental landlords is declining, which will put upwards pressure on rent. 

Supply is particularly constrained on properties below £1,000 per week, exacerbated by recent sell-offed in response to government tax hikes. 

The ratio of new prospective tenants to lettings listings was 7.9 in October, compared to a market average of 3.8. As a result of this imbalance, it says rental values are being driven higher, especially in the lower price brackets. 

Average rental values increased two per cent in PCL between £500 and £750 per week in the year to October. 

In Prime Outer London over the same period, there was a 1.5 per cent rise in properties priced between £250 and £500 per week.