Knight Frank says it’s seeing tenants in the prime London niche reflecting the same trends as those in the wider property market – a desire for more space, including outdoors.
The agency – which defines super-prime as £5,000 a week or more – says Hampstead became the third most popular location for tenancies agreed in the year to September, with the number of deals rising to 12 from five in the previous 12 month period.
The overall number of super-prime tenancies fell to 101 in the year to September, from 146 over the previous 12 months. However, there were 37 deals in Q3, which was higher than the same period last year and the maximum rental value recorded was £40,000 per week for the second consecutive quarter.
“We have seen some migration away from central areas” says Tom Smith, head of super-prime lettings at Knight Frank.
“Tenants are prioritising home gyms over gym membership and placing more priority on outdoor space. However, if they are moving outside the capital, they need to know they can get back quickly and many are adding a place in the country rather than replacing their London base.”
However, the trend for country living has not been as prevalent during the second national lockdown. “The difference this time is that the schools have stayed open” said Tom.
At the same time, the desire for the best amenities is also driving demand for luxury new-build schemes. “Some high-value schemes are trading incredibly well because everything tenants could possibly need is on site.”
Rents have been more resilient in the super-prime market than the rest of London.
Rental values in prime central London fell 9.1 per cent in the year to October, which was in large part caused by high levels of supply as more short-term lets came onto the long-let market.
This has not been the case in the market above £5,000 per week, where rents have remained flat compared
to 12 months ago, according to Smith.
“If a property came on a year ago at £20,000 per week, it’s coming on at the same price today. There is such little new supply coming through that this will support rents for some time.”
This post has originally been featured in Letting Agent Today.