An estimated 43% of new tenants in Prime London were from the EU in 2020, according to London Central Portfolio (LCP).
The proportion of tenants from the UK renting in Prime London reached 35% in the same time period.
The high proportion of UK tenants highlights the increasing affordability of Prime London rents and a desire to live in Central London, according to LCP.
Italian and French nationals represented the largest proportion of new EU tenancies in LCP’s portfolio for the year, at 26.8% and 19.5% respectively.
The time taken to let a vacant property increased in Q4 reaching a new peak of 76.8 days.
In addition the average length of tenancies increased, reaching 21 months over the course of 2020.
Rents achieved in 2020 were 10.4% below the six-year average.
LCP believe this to be a result of reduced demand from overseas tenants unable to enter the UK and an increase in available stock coming across from the short-term let market.
In line with previous years, the majority of new tenants in 2020 were under the age of 30.
A majority (90%) of tenants were under the age of 40 compared with 82% in 2019.
In 2020, on average rents dropped by 1% on renewals compared with an 11.48% reduction in rents on new tenancies.
Andrew Weir, chief executive of LCP, said: “Notwithstanding the pressures of a global pandemic and Brexit negotiations, London remained attractive to EU nationals.
“Happy to capitalise on the lack of overseas demand, a large proportion of UK tenants moved to Prime London attracted by widely advertised rent reductions, as landlords competed within a depleted pool of tenants.
“The impact of travel restrictions, on a market predominantly reliant on overseas students and young professionals, has been reduced demand, surplus of stock and longer void periods.
“Existing tenants have stayed in situ where the property is of a high standard and diligently managed.
“They have broadly been comfortable with paying passing rents during a time when new tenants have been able to negotiate significant discounts.
“This highlights the importance of tenant retention during periods of increased competition where prime London in 2020 was labelled as a renter’s market.
“The strength of covenant for those tenants within LCP’s managed portfolio has resulted in zero defaults in 2020.
“Looking to the future, landlords and buy-to-let investors should take reassurance that once the vaccine has rolled out and travel restrictions are lifted, London will again experience an influx of overseas tenants waiting in the wings to continue their metropolitan life that they have missed over the last year.”