During the first three months of 2017 Savills dedicated Super Prime Lettings team, which covers properties from £4,000 per week upwards across prime central and North London, saw transaction levels triple compared with the same period last year.

Over the last 12 months there has been a growth in super prime rental properties being brought to the market, mainly from developers providing new luxury homes and individuals who have chosen to let their properties while waiting to see how the sales market moves over the next couple of years.

This supply of available properties has been coupled with a rising number of high net worth individuals now choosing to rent rather than buy a London home. Only needing a base here for a few years and deterred from buying by the 2014 stamp duty changes, they find the cost of renting for the short term can make more financial sense.

While we saw steady increases in activity throughout 2016 as buyers and sellers took stock of the changing market, it wasn’t until 2017 that the full effects of this pent-up demand were really felt. In prime central London Savills new applicant registrations for super prime rental properties more than doubled in the first quarter of 2017 against the same period of last year.

The preference for renting has also continued amongst certain tenant demographics, for example corporate tenancies from international renters who move to London for work. For them, flexibility is key as they could be relocated again at any time. Likewise for international families whose needs may change based on their children’s schooling or where their work takes them.

Over the last few years we have also seen a number of young, mobile, global entrepreneurs who have more transient lifestyles moving from country to country, year by year. These wealthy tenants, who are typically under 40, prefer prime central London locations and want turnkey properties with everything included, from 24-hour concierge services to gyms, spas and even wine cellars, so they can simply turn up with their suitcases and move in. Certainly in new developments it’s what is expected.

There is also consistent demand from international ‘super prime students’ whose parents prefer to pay for them to rent privately rather than housing them in traditional university halls. Student tenants' main focus tends to be on proximity to their university and high-end retail areas, coupled with modern and luxurious fixtures and fittings.

Savills expects the prime central London sales market to remain broadly flat for the next two of years as the market continues to adapt to the higher transactional costs incurred by stamp duty and uncertainty caused by Brexit negotiations, which should see the demand for super prime rentals continue to grow.

Further information

Contact Savills Residential Lettings