London has ever been a location within the UK that has been universally admired as a location for property.
The capital has so much to offer, from great social amenities including a multitude of fabulous theatres and restaurants, to a choice of public transport options that allow for flexible travel throughout the day, every day.
Trevor Abrahmsohn, the owner of Glentree Estates, known for being a high-end agency in north London, has recently commented on international property buyers looking for premium London homes. He has noted that his firm recently registered an applicant looking for a luxury mansion, willing to spend £50,000 a week on a three-month tenancy.
It feels extravagant just imaging the facilities such a property would have to justify such a price. From a landlord’s perspective, this could either be the most lucrative investment they ever made, or the most disastrous one if the market for such properties collapses. However, there will always be a worldwide supply of the rich and famous looking to spend time in London in the highest state of luxury.
We would be interested to know who the landlords are behind the properties as well. Did they seek out a buy-to-let mortgage that would allow for such a purchase, or did they inherit? Many are likely to be overseas investors, making more than a living from the ownership of property worldwide.
Abrahmsohn has said: “To be honest, this reflects a new trend amongst certain foreign international clients who, in some cases, would prefer to pay an obscene rent, rather than purchase a property.”
With the decision to introduce a higher Stamp Duty rate for foreign property buyers by former chancellor George Osborne, the demand for high-end rental properties has been strengthened.
Abrahmsohn also commented: “[Osborne’s] draconian stamp duty impositions has meant that instead of purchasing a substantial mansion in London for, let’s say, a five year stint, which otherwise would have cost 20% of the purchase price to buy and then sell, some wealthy clients are choosing to use the money instead, as rent.”
Having looked on the Glentree website, we found that the most expensive property is currently available for £12,000 a week. For this price you get what is listed as a “detached family home” in Hampstead Garden Suburb, just north of Central London. Key features include an indoor swimming pool and gym, a cinema, and a staff bedroom with kitchen and ensuite bathroom.
If you were to look into such an investment, then consider the usual factors that add to the value of a property, as well as the impressive interior. Being located in a green area with scenic views, as well as maintaining a good distance from the next nearest property would attract those looking for peace and privacy.
If you were to consider a luxury penthouse apartment, investing in one that has access to exceptional concierge service would add to its appeal. It was only last November that newspapers were reporting on the multi-millionaire suing their building’s management company over the lack of concierges in their block of flats due to cuts. These flats, located in Knightbridge, go for over £15m, so clearly such tenants have a strong opinion of what they should receive for their money.
In 2017 Knight Frank, the independent real estate consultancy, has reported that last year they saw 137 leases signed weekly for a rate of £5,000 or more. This was a 34% rise for them from 2016, which showed a figure of 102. On top of that, 20 leases of £15,000 and over per week were also transacted last year, almost doubling their results of 11 from 2016.
It is possible that this increase is a result of a slow-down in high-end sales, due to market uncertainties caused by our current political situation.
Tom Smith, head of lettings at Knight Frank, has commented: “Demand is resilient due to higher rates of stamp duty and the associated uncertainty over the short-term prospects for price growth in the sales market. A lack of clarity regarding Brexit has also been a factor.”
If you were looking to enter the market for high-end rentals, where would your first choice of location be? In your opinion, what features do you believe tenants are looking for in the perfect house? We’d love to hear your thoughts.