London is experiencing a super prime rental renaissance buoyed by strong demand from both domestic and overseas tenants, from the US in particular – a clear signal that the UK capital remains a place where the world’s wealthy love to live, work and play.

In July Savills increased its five-year prediction for the prime London rental market as rents continue rising to new heights, forecasting upper-end rents in the capital to rise by a total 18.3 per cent by the end of 2026. In the year to June 2022, rental growth hit 13.5 per cent – the highest annual increase recorded in over 20 years – driven by an acute lack of stock and strong demand.

The coveted London lifestyle, being close to good schools, and trying before buying are reasons cited by high net worth tenants for favouring the capital. Some families are returning to London after moving to the home counties during the pandemic, while US families are relocating to London from Californian cities including Los Angeles, citing lifestyle and education as the main attractions.

85 per cent of demand is for fully furnished turnkey properties though renters, some of whom also have apartments in cities such as Paris, Venice or New York, still value being able to put their own stamp on a property. 

And where once the first choice for those with the means may have been an extended stay in a hotel suite, most now favour a rental property due to a combination of enhanced control, personalisation and lifestyle factors. Clients enjoy the convenience of having a full wardrobe of clothes they can leave behind in order to travel light, hanging their favourite piece of art on the wall for that homely feel and having informal, private spaces to entertain friends and family. On top of this their annual accommodation expenditure can be lower so it’s often a win-win situation for them.

Generally most will want a lease of two years or more to really put down roots in the capital.

Areas including Kensington and Chelsea, Mayfair and Notting Hill are proving particularly popular. Constant draws, including the internationally respected schooling system and the city’s cosmopolitan feel, remain a big pull and will help maintain demand against a backdrop of inflationary headwinds.

During the pandemic we saw a surge in tenants looking to rent a property within walking distance of work or school. This has continued, particularly in areas such as Kensington, Mayfair and Notting Hill as people have realised the wellbeing benefits it brings. Now however, we have many clients who are renovating a home and are looking to rent nearby so often the question has become ‘can I walk to both my work and building project from here?’

There has also been a shift in the perception of renting in the last few years. Once owning was the only choice for our wealthy clients, but the advantages of renting are now widely recognised. Not only does it provide access to a covetable lifestyle, it gives the flexibility to try out different hot spot neighbourhoods before committing to buying and the considerable stamp duty outlay that now involves.

Further information

Contact Isabella Birch Reynardson or Hannah Norton

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