Rich and renter?

Rich and renter?

“Generation rent” might be priced out of the UK property market, but renting is also becoming more prominent among a very different group : London’s richest.

With an increase in stamp duty on second homes and prices starting to fall in the capital’s wealthiest areas, would-be-buyers of homes worth more than £10m are increasingly are more and more opting to become tenants instead.

Agents named the uncertainty over the UK’s referendum on its EU membership and concerns about the use of offshore companies for property purchases following the Panama Papers leak as possible reasons for the shift.

Since 2011, the number of letting deals on homes worth £10m+ each year has more than doubled, and rose almost 33% in the year to March 2016, according to figures by estate agency Knight Frank.

During the same period of time, sales of home with such a high value dropped to 138, down from a peak of 206 a year earlier.

“No one is predicting that homes at the top end will be worth 10 per cent more in the near future and most people think they will be worth less,” said Henry Pryor, a buying agent. “It is much easier to make a decision to rent and make sure that if you do buy it’s something you really want.”

Tom Bill, head of London residential research at Knight Frank, explained that stamp duty now on a £15m home would come up to a total of £1.7m, equalling three years worth of rent. This rate is even higher if the buyer already owns another home, due to reforms made to stamp duty earlier this month.

The length of the stay of “supreme renters” has also extended. It is now reaching two years, after averaging between 12 and 17 months for the five years before.

Leases setting you back £5,000 a week or more can be found in plenty around areas such as South Kensington, Knightsbridge, Mayfair, Regent’s Park and Holland Park. This can be a lucrative business for landlords achieving up to 4% yields here, compared to 2.9% on average in London.

Mr Pryor said the Panama Papers leak, which revealed the owners of a series of offshore companies used to buy London properties, had highlighted that “no one can [buy] quietly”. He added: “There are some people who will be put off by that, and they should be.”

Charles McDowell, a high-end estate agent, explained that he had received various rental offers on properties that had been marketed for sale.

However, Tom Smith, head of super-prime lettings at Knight Frank, warned potential landlords of such homes to expect demanding tenants. “A common mistake is to think the requirements of a tenant are less stringent than they are if they were buying the house,” he said.

Source: Financial Times

Self-certified Sophisticated Investor

Please read

I declare that I am a self-certified sophisticated investor for the purposes of the restriction on promotion of non-mainstream pooled investments. I understand that this means:

I am a self-certified sophisticated investor because at least one of the following applies:

I accept that the investments to which the promotions will relate may expose me to a significant risk of losing all of the money or other property invested. I am aware that it is open to me seek advice from someone who specialises in advising on non-mainstream pooled investments.

High Net Worth Investor

Please read

I make this statement so that I can receive promotional communications which are exempt from the restriction on promotion of non-mainstream pooled investments. The exemption relates to certified high net worth investors and I declare that I qualify as such because at least one of the following applies to me:


Sign up for first access to new developments and exclusive property investment opportunities.

We send limited and targeted emails on new launches and exclusive deals which best fit your areas. We are trusted by over 30,000 active buyers as their source for new stock.

  • New property developments
  • Professional market reports
  • Property deal alerts
  • Development updates
Manchester property investment


Receive trending news straight to your inbox and stay up to date on all of the property market trends and advice.

Established since 2005 we are a leading voice of authority and commentary on the UK property market. Our news is trusted by Apple News & Google News.

  • UK housing market
  • Mortgage & money
  • Buy-to-let landlords
  • Guides & advice

Talk to us

Speak to our UK property experts today:


+44 (0) 333 123 0320

Open from 9am-6pm GMT


+852 6699 9008

Open from 9am-6pm HKT