Rents at the top end of the London market ended 2022 10.9% higher than when the year started, according to an estate and lettings agent.
Demand from tenants is continuing to significantly outweigh supply, Savills said.
Jessica Tomlinson, research analyst at Savills, said: “The ongoing imbalance between demand and supply is expected to continue to drive rental growth.
“However, the sheer scale of rental growth over the past two years does somewhat limit the capacity for further significant increases, and over time we expect to see the balance between supply and demand gradually restored.”
Smaller properties in lower price bands now tend to be outperforming larger, more expensive rental homes, Savills added.
Ms Tomlinson said: “Rental properties at the top end of the market are dictated largely by discretionary spending.
“The market is certainly less frantic than it was during the middle of 2022, and now prime tenants feel they can bide their time to see how the next couple of months play out, which is translating into slightly slower levels of growth.
“However, our agents agree that young professionals and corporate demand continue to make up the bulk of demand, and we can expect these ‘needs-based’ tenants to continue to drive up competition in the early part of 2023.”