London’s ultra-prime rental market has returned this year to pre-Covid levels for the first time, an agency claims.
Beauchamp Estates - using data from Lonres showing all London rental deals done at £5,000 and above per week in the first half of 2023 - says 63 deals were done above £5,000 pw, of which 38 were for houses and 25 for flats. All the properties generated a combined monthly rent roll of £2.39m.
Of the 38 super-prime house rental deals during the first half of 2023, 10 were in North West London postcodes. The dominating areas were St John’s Wood and Hampstead, with NW3 taking the mantle of North West London’s most expensive rental - £15,000 per week for a furnished six-bedroom house with outdoor swimming pool.
Over the first six months in 2019, the same number (63) of top-of the market rental deals made with the total combined monthly rent achieved for all the houses and apartments also very similar to 2023 at £2.49m. However, in contrast to 2023, back in 2019, of the 35 ultra-prime houses rented, just six were in NW postcodes, with the dominating demand being for flats in the SW1 (13 deals) and W1 (nine deals) postcodes.
During the first half of 2020, as the pandemic struck, the volume of super-prime rental deals dropped to just 38, the majority of them (70 per cent) for houses, a trend that has become known as ‘the outdoor boom’.
Beauchamp says the super prime lettings market has moved beyond its traditional heartland of Knightsbridge, Belgravia, Mayfair and Kensington - where many apartments traditionally lack sizeable private outdoor space – with wealthy tenants now looking for houses and apartments with large terraces in North-West London postcodes, with favoured enclaves including Regent’s Park and Primrose Hill (NW1), St John’s Wood (NW8) and Hampstead (NW3).
The luxury rental market is now also highly competitive, with three or four serious tenants often vying for the same property, and the victor happy to pay one or two years’ rent up front. Earlier this year, the estate agent achieved £10,000 per week on a lavish Marylebone apartment that had been initially marketed at £7,000 per week, with the tenant moving in within seven days of finalising the terms.
The most active tenants on the current London ultra-prime rental scene are wealthy international expats from Ukraine, Denmark, Turkey, China, the United States and Eastern Europe. For wealthy Eastern European families concerned by the Russia-Ukraine crisis, the British capital also feels particularly safe and secure.
During the summer months this year, Beauchamp Estates reported an influx of Chinese and Middle Eastern clients, keen on short-term rental contracts on detached, large family houses and swimming pools, often in St John’s Wood and Hampstead.
Erik Holmgren, lettings manager at Beauchamp’s Mayfair office, says: “The super-prime lettings market in London has boomed in 2023 with UHNWI tenants moving beyond their traditional focus on Mayfair, Belgravia and Kensington to look at letting super-prime homes in locations including Marylebone, St John’s Wood and Hampstead.
“Over the past six months Beauchamp Estates has secured super-prime lettings deals which have generated combined annual rental income of over £5.5m, with tenants from America, China and the Middle East being particularly prominent in the PCL market over the last six months.
“In Mayfair we have let apartments to tenants from the USA and Western Europe and our lettings portfolio of houses in Mayfair and Chelsea have found favour with tenants from the Middle East and Asia. Marylebone has become a sought-after luxury lettings destination, with apartments securing tenants from the USA and China. In Hampstead houses and apartments have attracting families and students from China and Western Europe.”
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