An oversupply of buy-to-let properties south of the river has seen rents decline in prime London, a property investor has warned.

Research by London Central Portfolio (LCP) found the lettings market is being impacted by a proliferation of new developments, resulting in supply beginning to outstrip demand in some areas.

According to LCP, the London market south of the river is beginning to suffer as large numbers of the planned 22,000 units between Battersea and Nine Elms have come to market.

Data analysed by LCP found an annual increase in available rental properties in this area amounting to 28.1%. This has been accompanied by a 6% discount on asking rents over the past three months, although no actual figures behind these percentages are available.

The number of properties actually let across prime postcodes of SE11, SW11 and SW8 has dropped 14.8% over the past three months, LCP said, and there has been a fall in achieved rents of 2.8%.

However, according to LCP, the picture for the rental market has been far more robust in prime central London where stock levels have increased by just 5%, rents have increased 1.5% and the number of properties being let has also seen a 2.5% increase over the past three months.

Naomi Heaton, chief executive of LCP, said: “In much the same way as we see in the sales market, there is increasing fragmentation in the lettings market, according to property type and by price point.

“Alongside the oversupply of rental stock in new-build heartlands, the uncertain economic outlook has resulted in tighter tenant budgets.

“In contrast to the dynamics south of the river, the mainstream rental market in PCL has continued to perform positively as demand for well-presented rental property remains high and stock remains scarce.”