Growth in demand for properties in London’s luxury lettings market has slowed significantly over the past year, according to a new study by Knight Frank.
The estate agent found that the number of super-prime tenancies (priced at £5,000+ per week) agreed in London’s luxury lettings market in the year to August was just 5% higher than the previous year, which marks a major slowdown from the 20% uplift seen earlier this year.
Tom Smith, the Head of Super-Prime Lettings at Knight Frank, attributes this to two factors.
“First, political uncertainty has made some people slightly apprehensive about the next six months,” he says. “Demand above £8,000 per week tends to be more discretionary, and we have seen the number of deals dip this year.”
There were just 17 tenancies agreed at a rent of £8,000+ a week in London’s luxury lettings market between January and August 2018, which is down from 26 during the same period in 2017 and 27 in 2016.
The second factor is the stabilisation of the super-prime £10m property sales market.
Knight Frank notes that, despite political uncertainty, higher rates of Stamp Duty are now reflected in pricing, and buyer interest is rising as a result.
The total value of all super-prime property sales between June and August was 93% higher than the same figure for 2017.
As the market stabilises, some landlords in London’s luxury lettings market have begun to consider a sale more actively.
Smith explains: “The owners of around a third of super-prime properties currently on the rental market would consider a sale at the right price. This is a higher proportion than we have seen for several years.
“Tenants are also starting to pay more attention to the sales market, so I sense we are at the start of a period where more of them could become buyers, which is why tailored advice is absolutely critical.”