The luxury lettings market in London is enjoying something of a resurgence, with increasing numbers of people opting to rent their plush city pads, rather than buy. “Mansion tax is making people jittery and driving a busier rental market,” says Mark Tunstall, director of the the Tunstall luxury lettings agency. Private buying agent Henry Pryor adds that around 30 per cent of current sellers are open to the idea of letting their property, due to “a relative shortage of available homes to let, coupled with sluggish sales market.”
Many of these new tenants are arriving in London from elsewhere in the world, and they are bringing their wallets with them. Often hailing from Russia, they are here to party at Chinawhite, having made their fortune in oil or human trafficking. Oligarchs are the tsars of the 21st Century; no price tag is too high, and no property is too extravagant.
But it’s not just the Russians heading this way. Well-to-do Chinese tenants have been a West End mainstay for years, and now more and more other nationalities are deciding to travel to London and try out the top-of-the-range new developments in desirable locations like Mayfair, which are springing up in response to this rental demand.
This is good news for luxe landlords and the lettings sector alike. Here’s why:
The Telegraph reported earlier this month on a young woman who paid a whopping five years’ rent upfront on her Knightsbridge apartment. That’s a lump sum of £4 million. While this is obviously an extreme case, it does speak to a wider trend of affluent tenants committing to longer tenancies. This in turn has a steadying effect on the surrounding lettings economy.”A strong rental market, that may momentarily out-strip sales, is something that will be a key characteristic of the 2015 property market, certainly for the first half of the year, prior to the election,” says Susan Cohen of Pastor Real Estate.
As the deregulation bill looks set to make short-term, higher-risk tenancies an attractive choice for homeowners, it is worth considering the security and peace of mind that a longer tenancy can bring to landlords, whether they’re renting to Russian royalty or a recruiter from Richmond.