Rental value declines in prime London have started to slowdown with initial signs that rents have bottomed out, according to Savills.

The firm reported that rents in prime London declined by 0.8% last year, with cheaper properties significantly outperforming more expensive ones. Price sensitivity in the market is a major factor, with properties renting for up to £500 per week having seen five-year price growth of 6.6%, compared to a 19.5% drop for those over £3,000 per week.

Rents have fallen by an average 9.6% across the capital’s prime markets since the EU Referendum in June 2016, but with falls slowing, Savills forecasts that rents will rise moving forward, although growth is expected to be curbed in the short-term due to continued economic and political uncertainty.

Savills predicts that rents will rise by an average of 11.5% over the next five years. Lucian Cook, Savills head of residential research, said: “We are seeing footloose, cost-conscious tenants drawn to prime areas that offer greater value, rather than confining their search to premium addresses, and there’s a deeper seam of demand for smaller properties driven by needs-based younger tenants.”