Strict staycation rules meant a glut of short-let properties came onto the long-let market at the start of 2021, which caused rents to fall sharply. Supply subsequently shrank as rules were relaxed, which took place as offices and universities re-opened, producing a steep rise.

Ahead of the introduction of a 3% stamp duty surcharge for landlords in April 2016, there was a spike in activity in the buy-to-let sector. Since then, demand has been in decline due to higher costs and fewer tax breaks as the government introduced measures that have attempted to tackle the issue of housing affordability.

Andrew Groocock, regional head of sales for Knight Frank’s City, East and North region in London, said: “The extent of the recent rent rises has started to compensate for some of the regulatory changes of the last few years. It’s increasingly driving activity in London’s apartment market.”

Meanwhile, property yields have looked attractive in recent years with interest rates at rock bottom and the strong fundamentals of a growing and undersupplied rental market in the UK are attracting a growing amount of institutional capital.

More than £1.4 billion worth of deals were agreed during the final three months of 2021 in the build-to-rent sector, pushing year-end investment volumes to a record £4.3 billion. Annual spend was up 19% on 2020, the previous record year. Deal volumes were also up by nearly a third year-on-year.

Knight Frank forecast that rental values will increase by 17.1% over the next five years in the UK, as the lettings market is underpinned by these strong fundamentals. The equivalent figure is 22.7% in prime central London and 19.3% in prime outer London.

Underlining the strength of demand, the number of international corporate relocation enquires received by Knight Frank from prospective tenants in March reached its highest level since August 2019.

John Humphris, head of relocation and corporate services at Knight Frank, said: “Demand is hard to satisfy at the moment and it will only grow as summer approaches. If you own a good property at the moment, the chances are that it will be let before it even comes to the market.”