According to research carried out for The Times, about 221,000 households earning more than £100,000 a year are renting a property privately in England and Wales and the experts are seeing this rise year on year.
For Dominic Wertheimer, Founding Director of property management company Lornham, the number of super-rich renters in the capital has never been greater and it’s not unusual for his clients to spend between £10,000-£40,000 a week for a prime property in one of London’s most exclusive neighbourhoods.
So why are the super-rich choosing to rent rather than buy? ‘2022 was the year of total political instability,’ says Wertheimer. ‘We had three Prime Ministers and four Chancellors so the ongoing uncertainty has meant many UHNW clients see super-rich renting as providing short term flexibility.’
Nina McDowall, Director at Strutt & Parker Sloane Street who specialises in rentals in Prime Central London tells Tatler that renting gives the super-rich a number of benefits. ‘It allows flexibility for tenants to ‘try before they buy’ in a given location if they plan on investing there later, provides freedom from maintenance costs, and there’s no stamp duty to pay on rental property.’
Currently, an overseas buyer can expect to pay almost 17 per cent on a second property, which equates to more than £3.3 million on a £20 million house.
Most uber-renters want to be in Belgravia, Mayfair and Knightsbridge with families often opting for picture-pretty townhouses in Kensington. Often clients are wealthy international families, lured to these London hotspots due to their proximity to schools, business opportunities and green spaces.
McDowall points to new luxury developments like One Kensington Gardens, designed by award-winning British architect Sir David Chipperfield, where no-expense-spared apartments, situated opposite Kensington Palace, come with all the benefits a person needs (24-hour concierge, valet parking, health spa). ‘There’s no service charge to pay on top of rental charges so it can often make financial sense to rent turnkey rather than buy,’ she says, adding, ‘tenants here will be living a central London lifestyle, unencumbered by the hassle of home ownership, and able to turn up with their suitcase at one of the most exclusive addresses in the world.’
While most uber-renters choose longer-term contracts often lasting between three and five years, there’s also a trend for shorter lets, reports the Evening Standard, where the likes of Sotheby’s are seeing requests as short as 14 days, often from those undertaking major renovations (something celebrities are well-versed in – Robbie Williams apparently temporarily swapped his Holland Park home for a £20,000-a-month rental in St John’s Wood in 2019).
For many uber-renters, it makes sense to have access to a central location. ‘We had a client paying 10k per week who barely used the property but needed a base should he need to come to London on a more permanent basis,’ says Wertheimer, who tells us he’s just secured a property for an international polo player in west London for the summer season.
Of course, sometimes the rental properties can be so good that they outshine the houses people actually own. As Wertheimer says, ‘renting requires a very small amount of capital to be deployed when compared with acquiring a home of similar calibre.’
For more gold-standard guidance on property, wealth management and tax and trust, visit the Tatler High Net Worth Address Book
https://www.tatler.com/article/super-rich-london-renters
