Few landlords deal in the rarified surroundings of the central London market, and new figures from lettings agency Knight Frank show exactly why – there were only 137 new ‘super prime’ tenancies of £5,000 or more a week started in 2020.

This was an 11 per cent decline from the 2019 total of 154.

However, the agency says there was a marked increase between the first and second half of the year due to the impact of Covid-19. In total, 87 super-prime tenancies were agreed between July and December, the second most active such period in the last seven years according to data used by the agency from consultancy LonRes. 

“A big driver in recent years has been the rates of stamp duty in the sales market and it is still a big motivation for tenants” according to Tom Smith, head of super-prime lettings at the firm. “That rationale is still there and will arguably grow with the extra two per cent surcharge that overseas buyers have to pay from April.” 

There were 15 tenancies agreed in first two months of 2021, which is the quietest start to the year in five years, due to the impact of international travel restrictions. 

“Some people went away for Christmas and decided not to come back for the re-opening of schools in March” says Smith. 

But he says there has been an uptick in interest from US tenants in recent months due to the change of administration. ”It hasn’t come through in the number of tenancies yet, but I detect rising interest from the US as questions grow over the tax landscape for high-net worth individuals there” according to Smith. 

One issue prospective tenants may face is a supply shortage in areas such as Chelsea, Notting Hill and St Johns Wood, in particular properties with gardens and close to a good school.

“I think tenants are still prepared to rent without outdoor space” Smith insists. “People are not necessarily planning for future lockdowns now. What some are doing is splitting their portfolio between London and the Country and are therefore happier to forgo some outdoor space in London.”