Prime property investments went from strength to strength in London in 2017, as 137 properties were let out at £5,000 plus per week over the year.
There was a 34 per cent increase in the number of prime properties let during 2017, up from 102 in 2016. Data from LonRes found that in the three-month period between July and September, 49 transactions took place. This is a record for a single quarter.
Knight Frank’s latest report on the prime property investments sector also found that the average length of a tenancy increased in 2017, reaching 589 days. This is up from 548 in 2016 and 528 in 2015.
The number of properties let for £15,000 or above per week reached 20 in 2017, almost doubling from 11 in 2016.
Knight Frank’s head of super prime lettings, Tom Smith commented: ‘The momentum of recent years is still gathering pace. Demand is resilient due to higher rates of stamp duty and the associated uncertainty over the short term prospects for price growth in the sales market. A lack of clarity regarding Brexit has also been a factor. As well as more transactions, the deals agreed are now on a longer term basis as renting becomes more accepted as a tenure model in the super prime market.’
The prime central London sales market is allegedly moving towards recovery mode as higher transaction costs are absorbed. Average property sale prices that exceed £10 million rose 0.2 per cent in the year until January 2018. This marks the first annual growth in almost two years.
Smith continued: ‘There is increasingly the opportunity to rent the sort of high quality stock that has come from the sales market that historically did not exist on the lettings market. The clear message for landlords is that super prime tenants will not compromise on quality in the same way as buyers will not.’