Quite a lot of super-rich people, it seems…
London’s super-prime rental and ultra-prime rental markets are thriving.
Some of the richest potential investors in London property are hesitant about buying the most expensive properties, waiting to see if next year’s general election will bring with it the introduction of a mansion tax.
Then there are last week’s changes to stamp duty, which have seen increased taxation on properties worth more than £937,000.
It all makes things terribly tough for one looking to live in ultra-luxury in London.
So those who might otherwise have invested in bricks and mortar are, it seems, renting instead.
High-end estate agent Beauchamp Estates has seen a 12.8% increase in the number of properties let at more than £10,000 per week rent, compared with last year.
The super-prime market: £1m+ a year in rent
The market for super-prime rental properties – those that cost £1m+ a year to rent – is also “extremely buoyant”, the company says.
In 2010, there were just two properties being let out for £1m+ a year by the estate agent.
Now you can find homes in Chelsea, South Kensington, Notting Hill, Regent’s Park, St John’s Wood and Holland Park that cost £1m+ a year to rent.
The rent on all homes in this super-prime rental price bracket, let by the estate agents in the first nine months of the year, comes to £102m in total annual rental income.
The ultra-prime market: £100,000+ a year in rent
The top 5% of London letting properties now have a £108,000-a-year entry point.
That’s the highest rental levels ever seen in the London ultra-prime market.
The average rent of an ultra-prime property in London is £3,500 a week. That’s a 23% rise since 2009.
Who’s renting the most expensive homes in London?
The ultra-prime market (£100,000+ a year) is split about half-half between flat and houses.
Beauchamp Estates says London’s most expensive rental houses tend to be snapped up by Africans, Middle East tenants and Russians/CIS.
“In the last two years, wealthy Africans, especially Nigerians, have become a driving force in the luxury resi market, replacing Russians and Ukrainians whose numbers have declined,” the company said in its report.
The super-rich renting London’s highest-end residencies have largely made their money from oil, gas, investments or commodities trading.
The flats and penthouses, meanwhile, are most often rented out by Brits, Americans, Continental Europeans and Asians.
They are generally working in banking, financial services or advertising/marketing, and are often in London on secondment for a couple of years.