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London’s ultra-prime rental market has rebounded to pre-pandemic levels, with a notable shift to North-West London as a hotspot for deals. In our new Super Prime Lettings Report, the findings shed light on the changing preferences of super-prime tenants.
The report, analysing data from LONRES and Beauchamp Estates’ market intelligence, unveils that 63 super-prime lettings deals (above £5,000 per week) were closed in the first half of 2023, indicating a resurgence. This included 38 house rentals, generating a combined monthly rent roll of £2.39 million.
NORTH WEST LONDON DOMINANCE
A significant trend emerges, with 10 out of the 38 super-prime house rentals located in North West London postcodes, particularly in St John’s Wood and Hampstead. Notably, NW3 claims the title of North West London’s most expensive rental area.
HISTORICAL CONTEXT
Comparisons with 2019 show a similar number of deals (63) in the first six months, with a comparable monthly rent of £2.49 million. However, the location preference has shifted, with NW postcodes becoming more popular.
SHIFTS POST-PANDEMIC
Post-COVID, the market experienced a ‘house boom,’ and in 2022, the demand for ultra-prime houses surged to almost 65% of total lets, indicating a shift in tenant preferences.
CURRENT TRENDS
Looking ahead, we anticipate a strong demand for homes above £5,000 per week, especially those offering private outdoor space or proximity to large parks. This is underscored by recent deals involving properties near Holland Park.
The current ultra-prime rental scene sees a diverse tenant pool, including wealthy international expats from Ukraine, Denmark, Turkey, China, the United States, and Eastern Europe. For those concerned about geopolitical issues, London represents a safe haven.
BUSY FORECAST
Summer 2023 witnessed an influx of Chinese and Middle Eastern clients seeking short-term rentals on detached family houses with pools in St John’s Wood and Hampstead. The upcoming quarter is expected to be exceptionally busy due to a shortage of luxurious family houses available for rent.
PRICING DYNAMICS
Data from LONRES indicates an average price per sq ft of £113 for both houses and apartments in the first half of 2023. Landlords are now seeking shorter-term contracts with break options, anticipating potential increases in the coming years.
The super-prime lettings market is certainly buoyant and we expect a surge in demand from various global regions, emphasising the trend of ‘try before you buy’ in addition to the demand beyond traditional central areas indicating a diversified and competitive market landscape.
Click here to read the latest edition of our Ultra Prime Barometer
