Data from Knight Frank shows that annual rental values actually grew in parts of prime outer London last month for the first time in three years.
The agency says tax changes introduced for landlords in recent years have put downwards pressure on supply levels across prime markets in London, forcing rents to stagnate or fall.
The growth reported in February was tiny - just 0.1 per cent - but nonetheless reversed the trend.
Meanwhile the agency says the ratio of new prospective tenants versus new supply in prime central and prime outer London rose to 5.4 in January.
The increase, largely due to a seasonal rise in new prospective tenants, indicates continued upwards pressure on rental values, claims Tom Bill, Knight Frank’s London research chief.
However, as the number of new rental listings has declined, so has the number of tenancies agreed in prime central areas of the capital.
There were 16.5 per cent fewer tenancies agreed in the year to January 2019 than the previous 12-month period according to Knight Frank’s analysis of LonRes data.
At the ultra-high end of the market, the number of new prospective tenants above £5,000 per week has plateaued since the middle of last year.