London’s ultra wealthy are opting to rent instead of snapping up homes as high interest rates and a tough buyer market have dampened interest.
The number of homes in London worth over £15m purchased by billionaires and millionaires in London came to a total of £340m between January and June, according to a new study by Beauchamp Estate.
This is down from £400m in the first half of last year and £514m during the six months of lockdown back in 2021.
Over the same period between 10 to 11 super-prime homes per month have been rented for values over £5,000 per week, with multi-millionaires and billionaires spending almost £15m to rent homes in London’s best addresses over the first six months of 2023.
As a result, the ultra-prime rental market in London is booming and rents in the capital’s prime postcodes have surged by 8.8 per cent annually, with PCL rental values now standing at almost 30 per cent above pre-pandemic figures.
Consistent rate rises from the Bank of England which have led to higher borrowing rates have been blamed for a slowdown in the housing market over the last year.
However, the central bank’s recent decision to keep interest rates at a record 15-year high of 5.25 per cent, following months of hikes, has provided some relief for the sector.
Gary Hersham, founding director of Beauchamp Estates said: “Luxury property in wealth hubs such as London, Manhattan and the French Riviera remains a safe asset class and as a result, these ultra-prime markets have shown remarkable resilience.
“In the sales market, the high share of cash purchases has helped to cushion the impact of higher interest rates, with American and Chinese/Hong Kong buyers being extremely active in the London market, and Americans also significant along the French Riviera.
He added: “In the super-prime lettings market strong demand and soaring rents and a lack of supply have been the key features of the market this year.”