London’s ultra-prime rental market has returned this year to pre-covid levels for the first time, and rather than simply focusing on Mayfair, Belgravia and Kensington, super-prime tenants are choosing leafy locales such as St John’s Wood, Regent’s Park and Hampstead, where they can find houses with large gardens, the findings reveal in a new Super Prime Lettings Report by Beauchamp Estates.

The report analyses data compiled by LONRES showing all rental deals done at £5,000 and above per week, within all areas of Prime Central London, between the months of January and June, from 2019 to 2023 (with 2021 omitted due to COVID-19), and draws on Beauchamp Estates’ in-house market intelligence and knowledge of tenants at the very top of London’s luxury housing market.

The figures for the first six months of 2023 reveal that a total number of 63 super-prime lettings deals were done at values above £5,000 per week, of which 38 deals were for houses (60%) and 25 for apartments. All the properties generated a combined monthly rent roll of £2.39 million, with the 38 houses generating a combined monthly rent roll of £1.56 million.

Of the 38 super-prime house rental deals during the first half of 2023, 10 were in North West London postcodes. The dominating areas were St John’s Wood and Hampstead, with NW3 taking the mantle of North West London’s most expensive rental – £15,000 per week for a furnished six-bedroom house with outdoor swimming pool.

Over the first six months in 2019, the same number (63) of top-of the market rental deals made with the total combined monthly rent achieved for all the houses and apartments also very similar to 2023 at £2.49 million. However, in contrast to 2023, back in 2019, of the 35 ultra-prime houses rented, just six were in NW postcodes, with the dominating demand being for flats in the SW1 (13 deals) and W1 (9 deals) postcodes.

During the first half of 2020, as the COVID-19 pandemic struck, the volume of super-prime rental deals dropped to just 38, the majority of them (70%) for houses, a trend that has become known as “the outdoor boom”. In 2022, in the aftermath of the pandemic, Beauchamp Estates analysis reveals that Ultra High Net Worth London property renters were keenly prioritising houses over apartments. Figures for January to June 2022 deals highlight that almost 65% of super prime lets were for houses (40 out of 62 deals above £5k per week).
Look forwards to the remainder of 2023 and into 2024, Beauchamp Estates say that for homes available to let for values above £5,000 per week, properties offering private outdoor space, or near large parks are now top of checklists, and can command premium rentals. This is exemplified by a lettings deal made by the estate agent earlier this year, with a detached period villa, just moments from Holland Park, rented to an overseas family who have moved to the UK for the children’s education for £8,750 per week.

Beauchamp Estates highlight that the super prime lettings market has moved beyond its traditional heartland of Knightsbridge, Belgravia, Mayfair and Kensington – where many apartments traditionally lack sizeable private outdoor space – with wealthy tenants now looking for houses and apartments with large terraces in North-West London postcodes, with favoured enclaves including Regent’s Park and Primrose Hill (NW1), St John’s Wood (NW8) and Hampstead (NW3).

Beauchamp Estates say that London’s luxury rental market is now highly competitive, with three or four serious tenants often vying for the same property, and the victor happy to pay one or two years’ rent up front. Earlier this year, the estate agent achieved £10,000 per week on a lavish Marylebone apartment that had been initially marketed at £7,000 per week, with the tenant moving in within seven days of finalising the terms.

Beauchamp Estates reveal that the most active tenants on the current London ultra-prime rental scene are wealthy international expats, from Ukraine, Denmark, Turkey, China, the United States and Eastern Europe. For wealthy Eastern European families concerned by the Russia-Ukraine crisis, the British capital also feels particularly safe and secure.

During the summer months this year, Beauchamp Estates reported an influx of Chinese and Middle Eastern clients, keen on short-term rental contracts on detached, large family houses and swimming pools, often in St John’s Wood and Hampstead.

Beauchamp Estates predicts that this quarter will be extremely busy, as there is a shortage of sizeable, luxurious family houses available for rent, as many landlords have decided to sell in the face of rising costs. Some international families are taking on short-term rentals with a view to purchasing next year – they prefer to explore a neighbourhood before committing to buying a multi-million-pound home.

The LONRES data shows that between January and June this year, the average price per sq. ft. achieved for both houses and apartments was £113 per sq. ft. – with some landlords asking prospective renters to expect 10% annual increases in long term contracts, and to commit to shorter terms with break options built-in. This way, owners of prime properties are not overcommitting themselves to tying away their assets for too long should they want to sell in 6-12 months.

Gary Hersham, Founding Director of Beauchamp Estates, says: “The Super-Prime lettings market in London is extremely buoyant, and we have seen a huge rush of enquiries recently. Lettings deals done during the first half of the year indicate there is a robust appetite for trophy rental homes, with both domestic and overseas clients happy to venture further afield from Mayfair, Belgravia, Knightsbridge and Chelsea, to homes in St John’s Wood and Hampstead. Here, they can try out living in a large family home with a sizeable garden – having private outdoor space is a soaring, post-pandemic trend – and spa facilities. Where in the past families have typically committed to renting a new property by the end of July due to schooling, autumn has been incredibly busy as people continue their search – a result of many sizeable rental properties having been sold due to increased expenses for landlords, resulting in record lettings prices being achieved.”

Erik Holmgren, Lettings Manager at Beauchamp Estates (Mayfair) says: “The super-prime lettings market in London has boomed in 2023 with UHNWI tenants moving beyond their traditional focus on Mayfair, Belgravia and Kensington to look at letting super-prime homes in locations including Marylebone, St John’s Wood and Hampstead. Over the past six months Beauchamp Estates has secured super-prime lettings deals which have generated combined annual rental income of over £5.5 million, with tenants from America, China and the Middle East being particularly prominent in the PCL market over the last six months. In Mayfair we have let apartments to tenants from the USA and Western Europe and our lettings portfolio of houses in Mayfair and Chelsea have found favour with tenants from the Middle East and Asia. Marylebone has become a sought-after luxury lettings destination, with apartments securing tenants from the USA and China. In Hampstead houses and apartments have attracting families and students from China and Western Europe.”

Francesca Fox, Lettings Manager at Beauchamp Estates (St John’s Wood) says: “Amongst the ultra-wealthy looking for homes in London there is a burgeoning culture of ‘try before you buy’. At the top end of the rental market are the dream family houses and mansions, which often have several serious tenants competing for them, driving up lettings values. We feel this market will boom for another 12 to 24 months, after which some of these tenants will look again at purchasing – for many, this remains their long-term goal in London.”