A central London letting agency has revealed it grew by 30% last year and expects a further 30% expansion this.

Upmarket firm E J Harris says that its growth is being fuelled by the strong London economy, with 50% of its business being corporate lets and embassy instructions.

However the firm is also benefiting from hikes in Stamp Duty Land Tax for pricier properties and the uncertainty over Mansion Tax, which it says are holding back the sales market.

Elizabeth Harris, who founded the firm in 2004 after working for Foxtons for a number of years, said: “The strength of the London economy is fuelling the capital’s lettings market.

“Rental values rose by around 3% to 4% across prime central London last year and will rise 2% to 3% this year.

“Over the last two years we have seen a significant increase of instructions in central London and this, alongside the rise in Stamp Duty and uncertainty over an additional Mansion Tax in the lead-up to the election, has generated a 30% increase in vendors looking to let rather than sell, and additional households choosing to let rather than purchase.

“Concerns have led vendors to place properties on the lettings rather than sales market. Likewise potential purchasers have chosen to stay in rented accommodation this year until the results of the election and its property implications are known.”

In the market above £4,000 per week, she says tenants are making a choice between living in a rented property and a luxury hotel.

Yesterday, the firm’s highest priced property is available at £20,000 per week.

The firm’s website is here