More multi-millionaires and billionaires are choosing to rent super-prime homes in London, rather than purchase, reveals a new wealth report
Beauchamp Estates’ latest Ultra-Prime Barometer Wealth Report suggests that because of Stamp Duty and rising interest rates, the number of multi-millionaires and billionaires choosing to rent super-luxury homes (defined as being £15m-plus) in London in 2023 has far exceeded those choosing to buy.
It says that with UHNWIs typically spending on rent anything from £5,000 to £30,000 per week, the favoured locations to let are Mayfair and Belgravia for apartments and St John’s Wood, Regent’s Park and Hampstead for houses
Beauchamp says that in the first half of 2023, multi-millionaires and billionaires purchased £340m worth of homes valued above £15m in London, equating to two billionaire homes sold each month. Over the same period between 10 to 11 super-prime homes per month have been rented for values over £5,000 per week, with multi-millionaires and billionaires spending almost £15m to rent homes in London’s best addresses over the first six months of 2023.
As a result, the rents in the capital’s prime postcodes have surged by 8.8 per cent annually, with PCL rental values now approaching one third above pre-pandemic (2017-2019) figures.
The report says that London remains one of the most popular destinations in the world for billionaires to own or rent a home, suggesting that the quality of restaurants, cultural facilities and sporting venues, top education, and a safe haven for capital and personal security being the key reasons.
However, the agency claims billionaires have also become wary of buying homes in London because they are worried that a change of government from Conservative to Labour in 2024 could result in rises to Stamp Duty, other wealth taxes and further regulation.
Because of this, Beauchamp Estates warns that London is facing rising competition from rival billionaire destinations in particular the French Riviera, Los Angeles and Miami - and in particular Dubai, where the number of £15m-plus home sales is double that of London.
Erik Holmgren, lettings manager at Beauchamp Estates, 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 £5.5m, 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.”
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Although Stamp Duty and higher interest rates might have something to do with it for some of them I'm willing to bet they are responding to far more important factors (from their super-wealthy high net worth perspectives) such as current world events and the need to remain liquid and flexible, plus a general and perfectly understandable loss of confidence in the medium (and perhaps also longer term) investment opportunities in London, given the way things are going.
It's a lot of hassle and commitment owning a property, and a highly illiquid asset too.... much easier and more flexible to rent provided you can afford to.... and these people definitly can many times over.... so why not?
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