Knight Frank forecasts cumulative rental growth of 11 per cent in prime outer London and 10 per cent in prime central over the next five years.

The agency says private investment and public spending are likely to stimulate tenant demand as the economy strengthens but there will also be downwards pressure on supply as more meaningful house price inflation returns to the sales market, prompting more owners to sell. 

“We expect this lack of supply to have a more marked impact in lower-value lettings markets” explains the agency’s research chief Tom Bill.

The number of new rental listings in prime central London declined eight per cent in the year to November compared to the previous 12 months. 

The decline in prime outer London was 14 per cent over the same period. 

“We would expect this trend to accelerate in 2020 in response to an anticipated bounce in the sales market” explains Bill.

The agency reports that the number of new prospective tenants per new rental listing was 7.5 in November for properties valued at less than £1,000 per week in prime central and prime outer London.

This is greater than the figure of 3.4 for properties valued between £1,000 and £4,000 per week