Stamp duty rise sees super-rich prepared to pay £20,000 per month to rent London property

The stamp duty changes put up tax on buyers of homes worth more than £937,000

Joanna Bourke
Friday 24 July 2015 14:41

Fears over the general election and a higher stamp duty bill have triggered the rise of the super-rich renter, prepared to fork out £20,000 per month for a luxury London home, a leading estate agent says.

Knight Frank reported a 182% surge in the numbers of applicants willing to pay £5000 a week for luxury rentals in the three months to June 30 - with some homes featuring swimming pools, gyms and even space for live-in staff.

There was also a 34% increase in the number of tenancies signed in this price bracket in the year to March 31.

Tom Smith, head of super prime lettings at Knight Frank, said the stamp duty hike last December and uncertainty surrounding the general election saw “dampened activity in the prime central London sales market this year”, with many people choosing to rent instead.

The stamp duty changes put up tax on buyers of homes worth more than £937,000 while Labour also threatened to slap the owners of homes worth more than £2 million with a mansion tax.

Potential buyers were also more picky and prepared to rent luxurious flats for up to two years while they wait for their dream homes. Smith added: “More sellers have opted to become landlords, increasing the supply of super-prime rental properties in London.”

“Tenants are now able to find properties available to rent where the quality of the product mirrors their uncompromising expectations,” said Smith.

Knight Frank has set up a new high-end 12-strong leasing team to capitalise on the booming market.

Mayfair, Chelsea and St John’s Wood are among the areas of choice for the renters, many of which are International High Net Worth Individuals.

Homes on the rental market at the moment include a house on The Bishops Avenue in Hampstead, dubbed 'Billionaires' Row’ for £21,450 a month, and a Canary Wharf penthouse for £20,584 per month.

Louise Good, head of super prime lettings at Savills, said the company had also witnessed a surge in renters and that the market for big rents in the capital "is very robust at the moment".

She said there was also a rise in the number of enquiries for properties at £15,000 per week or above in areas such as Kensington.

Good added: "A significant proportion of these homes will however be off-market as landlords appreciate that these wealthy tenants looking for super-prime homes often like to rent properties that feel private and exclusive."

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