Growth residential rental values in prime central London is forecast to increase by a further 10% this year (after rising 10% in three months from February 2007), according to Savills.

With a limited amount of freehold supply and continued associated strong capital growth forecast, more demand is expected to overflow into the rented sector.

“We see this year as a turning point for residential rents in prime central London and expect to see a significant upward spike by the year end”, said Lucian Cook, director of Savills Research. “At the very top end of this sector, where rents average more than £1,500 per week, we anticipate annual growth of at least 12%.

“The continued expansion of London as a major financial centre and the associated growth in employment figures in the city are strong drivers for growth. There is an increasing demand from young, well-paid executives for whom renting is a viable alternative to purchase.”