The Boom in London’s Super Prime Property Lettings
Over the last ten years, the top of the luxury London property market has borne witness to spectacular growth. Record low interest rates, the insatiable thirst of the foreign buyer and the Capital’s impressive infrastructure, have boosted asset prices in the Capital. However, this upwards trajectory has been tempered by a combination of factors, including; the stamp duty surcharge on second homes, Brexit and changes to the non-dom rules. Nevertheless, London’s desirability as a place to live has remained strong. Therefore, whilst the top of the ultra-prime London sales market has entered a more nuanced period – demand for super prime luxury London rentals of £5,000 a week plus is outperforming all other areas of the market.
Demand for Super Prime London Rentals
In 2017, the market for super-prime rentals reached its historic peak. According to a recent report, over 137 homes of £5,000 per week plus were rented by tenants looking to get a foothold in this exclusive part of the market. This represents a year-on-year increase of 34%.
This is partly explained by the fact that buyers at the top of the market, for £10 million plus properties, have become more tentative. Many are happy to adopt a “wait and see” approach as Britain negotiates the terms of Brexit with the European Union.
Furthermore, the stamp duty surcharge on second homes means that for many buyers, the SDLT they would pay, is the same as the cost of renting a property for several years. Therefore, many are choosing to “try before they buy”, prior to committing to a purchase.
Interestingly, the ultra-prime part of the market is still under-supplied and the number of tenancies achieved in 2017 could have been higher, had there been more available stock.
The Ultra-Prime Property
The top of the ultra prime rentals market is dominated by homes in Knightsbridge, Mayfair, Belgravia and for families and security conscious foreign applicants, Hampstead. Apartments in these locations can typically command between £10,000 – £30,000 a week.
Understandably, at this end of the market, applicants are exacting with their requirements. The majority of those looking to rent super prime London property use property search agents to prescreen homes, before they view for themselves.
In particular, applicants from abroad looking to rent ultra-prime London flats, often prefer large lateral apartments in period buildings with live-in porters. Lateral apartments such as this traditional British flat for rent in Queen Street, Mayfair are rare within London’s architectural landscape of tall skinny houses. However, when they are available, they typically command a premium.
The alternative to apartment living is of course, the more ubiquitous London townhouse. Whilst many of these terraced or mews houses may look unassuming from the outside, the story beyond the keyhole is a very different one. Homes at this level boast the highest specification, bespoke interior design, unusual finishes and a completely “turn-key” product.
It’s not unusual to find amenities such as wine cellars, fur fridges, cinema rooms, swimming pools, gyms and even car lifts all within the footprint of a single family dwelling.
The Super-Prime Rentals Prognosis for 2018
2018 promises to continue the trend for wealthy applicants looking to rent at the top of the ultra-prime property market. The constrained supply at this level means that prices will continue to grow as demand outstrips availability. Brexit or no Brexit, there’s no knocking London from its perch at the forefront of the world’s most desirable places to live.
Hanushka Toni is an established writer and editor of luxury blog, Luxury Marionette. She graduated with a first honors law degree from Kings College London before working as a private client solicitor in the City. She subsequently left the law to pursue writing full time.
Hanushka has written for many top UK publications including the Spectator where she has been a regular contributor. She is currently based in Monaco from where she writes for a range of publications, as well as working at Relevance, a luxury digital marketing agency.