Simon Barnes highlights how the demand for a super-let in Prime Central London is on the up:
“Over the past few years, Prime Central London’s ‘super prime’ market has stalled but not stopped. Global events such as the oil crisis, China’s flagging economy and Russian actions in the Ukraine affected international buyers irrespective of where they came from. Consequently, rather than for example only three out of ten overseas buyers being adversely affected by a world event, all nationalities whether Arabs, Russians, Chinese, Indians or Europeans, have experienced some negative impact as a result of economic and political uncertainty.
This in turn, has affected the number of ‘super prime’ properties remaining unsold across the most desirable postcodes in Prime Central London. Taking a pragmatic approach has seen savvy developers and sensible vendors take a decision to offer their properties to the rental market for a two to three year rental rather than reduce the asking price and lay themselves open to accepting an even lower offer. The advantage being that over a limited term they can achieve exceptional rental revenue, whilst retaining their property asset and relaunching on the market at a later time when the PCL super prime market looks promising. It really is the common sense approach to wait until the market shows a positive change assuming no forced sale is involved.
Recently H Barnes & Co, in conjunction with Knight Frank, rented a house in Mayfair for in excess of £20,000 per week. This deal is a great example of how a high end residence which had remained unsold attracted intense competitive interest the moment it became available to rent.
Rental properties of this calibre are few and far between, so when one comes available, they attract the attention of the UHNWI. As far as the tenants go, their motivation for renting tends to be based on individual circumstances rather than a desire to rent. It might be that their own home is undergoing a comprehensive refurbishment, or undergoing major repairs, or they are waiting for the right property to come to market. A whole host of reasons, but for them money is not object and they will have an exacting brief when it comes to securing the right hard-to-come-by rental property at this level of the market. It is not uncommon for owners of these properties to agree to a long term rent and then a sale at some point further down the line. At H. Barnes & Co we have dealt with several clients who have gone on to buy their rented home.”
This article by Simon Barnes was originally published in PrimeResi (subscription) on 5 May 2017