Rental values in the capital have experienced two quarters of strong growth, but have finally plateaued, according to research from letting agent Benham & Reeves Residential Letting.

Across the capital, only a few areas saw substantial increases in rent over the last quarter as the market finally flattened out.  Most parts of central London saw rents remain at the same level or saw increases of less than two per cent.

These figures echo market conditions across most of east and south London which also saw rental growth stall after a long period of growth.  Conversely, parts of north London saw price falls as seen in the previous quarter.  Continuing issues on the Northern Line and the closure of the interchange at Tottenham Court Road during Crossrail works have put off many would-be commuters.

But analysts at Benham & Reeves Residential Lettings reckon this is simply a temporary lull.

Lettings director, Marc von Grundherr, said: “Successive Budget announcements have seen many landlords’ tax advantages disappear while regulations increase.  With stamp duty attracting an extra three per cent from April, we anticipate supply will fall as amateur landlords exit the market or seek out other asset classes.

“When supply falls, rents will invariably go up.”