Mayfair’s rents fell by 14.8% year-on-year to £678 a week, while Knightsbridge yields went the other way – rising by 19.4% to reach £732 a week.
Across the whole of Prime Central London rents rose by 4.2% over the last year to £602 a week.
Naomi Heaton, chief executive of London Central Portfolio, said: “The key dynamic in this marketplace remains ‘location over size’.
“The squeeze on rents during the credit crunch as corporates underwent stringent belt tightening has not relaxed, meaning that smaller properties remain the most popular amongst corporate tenants who are attracted to the ‘bright lights’.
“The huge influx of international students, often living on their own, adds to this demand. Around 80% of properties rented in PCL are 1 or 2 bedroom units.”
South Kensington is considered a favourite for French tenants fleeing their homeland’s tax regime.
The most affordable areas to rent in PCL are North and South East of Hyde Park, with Bayswater & Paddington demanding the lowest average weekly rent of £538 a week.
Heaton added: “As the centre of gravity in PCL moves to the less traditional areas benefiting from good transport links and architectural heritage, the rapid increases in sales values have not been reflected in rents.
“As gentrification continues, rents are now playing catch-up. The smart buy-to-let investor will look away from PCL’s better known locations to central areas where there is still room for both prices and rents to go up.
“There has been a paradigm shift amongst tenants who increasingly demand immaculately presented flats and service on tap. Landlords need to realise that tenants are looking for a complete ‘lifestyle experience’ if they are to maximise yields and minimise voids.”
