Prime London rental growth reached 14% in the year to the end of September 2022, according to Savills, as tenant demand continues to significantly outweigh supply. This is the highest growth since the firm’s records began in 1979.

On the quarter, rental prices grew by 3.3% across the London’s prime markets, the top 5% to 10% of the market by value. This follows three consecutive quarters of growth above +3%.

“Against an increasingly difficult economic backdrop, prime London rental growth has reached new highs. Intense competition to find somewhere to live in the capital – especially during a period of significant student demand – is outweighing the higher cost of living and concern over the UK economy, particularly given the acute shortage of stock,” said Jessica Tomlinson, research analyst at Savills.

“However, the current rental price growth trajectory cannot be sustained. With the sales market slowing, we would expect to see more accidental landlords enter the market, whilst post-pandemic pent up demand should also start to normalise towards the back end of the year,” she added.