The weird and wonderful world of London’s super-prime rentals

When Neil Short became a lettings agent, it is fair to assume that he didn’t expect to find himself googling exorcists because a wealthy tenant feared his rental home was haunted.

James Nightingall recalls having to paparazzi-proof a home for a world-famous actress. And Matthew Huybrechts had to inform the owner of another luxury property that their new tenant had requested the designer kitchen be gutted and converted into a walk-in shoe closet. “The tenant didn’t need a kitchen as they’d only order in or eat out,” he explained.

Welcome to the weird, wasteful, but flourishing world of super-prime rentals, where tenants often pay north of £1 million a year to secure the most lavish properties in London.

And, with high taxes and little prospect of any capital growth deterring these ultra-wealthy individuals from buying, business is brisk among visiting celebrities, newly signed footballers, billionaires and tech bros with business in London, oil royals avoiding the heat at home, and even teenage students.

Soaring demand for high-end rentals

Prime London’s sales market might be flagging — prices down eight per cent in the past year according to property analyst LonRes — but demand for high-end rentals is booming.

According to estate agent Knight Frank the number of new super-prime tenancies —costing £5,000pcm or more — agreed in the three months to August was 13 per cent higher than the five-year average.

This demand is putting upward pressure on prices, with prime rental costs up more than five per cent in the past year, and 41 per cent since before the pandemic.

For an officially swanky London flat you would need to shell out £949 per week (a cool almost-£50,000 per year). A super-prime house would set you back more than twice as much – an average £2,546 per week or more than £130,000 per year.

Of course in reality high-rolling tenants often pay far more for a temporary home. The most expensive deal Nightingall, boss of Suites & Villas, has ever inked was for £150,000 per week — yes, per week — with an American billionaire visiting London for work.

For that he got a 4,779 sq ft penthouse at the Mandarin Oriental in Knightsbridge, its three bedrooms decorated with fine silk wallpapers and with a library curated by Mayfair antiquarian bookshop Heywood Hill.

The Mandarin Oriental in Knightsbridge

Mandarin Oriental

Short, area director at JLL, can’t quite compete with that. But he does recall agreeing a £19,000 per week rental for an eight-bedroom house in Addison Crescent, close to Holland Park. The family lived in the house for three years, paying out close to £3m.

London’s super-prime tenants are a glamorous bunch. Many work in film or TV, in front or behind the camera, and are in town to work at one of London’s theatres or at Pinewood Studios. Others are touring pop stars seeking a retreat from screaming fans.

Nicole Kidman, despite recently confessing to owning a bolthole in Notting Hill, rented Boy George’s gothic mansion by Hampstead Heath when she was in town filming the sequel to Practical Magic.

And Gordon Ramsay rented a £12,000-a-month flat at Battersea Power Station to avoid the dust while his family home in Wandsworth was being renovated.

Boy George’s Hampstead mansion, once rented by Nicole Kidman

LS

“Footballers are another group, particularly around transfers,” said Nightingall. “I once helped a Chelsea player and his family with their accommodation. We’re also seeing more founders and people from technology, venture capital and finance. For them, renting often makes perfect sense because London may only be one of several cities they spend time in.”

Most of Huybrechts’ tenants are visiting from overseas, and want to stay for a few months to make the most of London’s summer season — “cooler than the Middle East” — and enjoy its restaurants and private members’ clubs.

Others are studying in London and their parents will pay between £10,000 and £20,000 per week to put their little scholars up in Mayfair digs for the duration.

Location is very much a matter of personal choice. Some of Short’s tenants have their hearts firmly set on Mayfair. “We have applicants who simply won’t consider anywhere else — even neighbouring Fitzrovia or Marylebone,” he said. “Footballers tend to head close to their club, while diplomats prefer to be close to Belgravia.”

“The interesting thing is how little some of them get used”

Short

But wherever they want to live they generally tend to want plenty of bells and whistles — gyms, swimming pools, and cinema rooms. “The interesting thing is how little some of them get used,” said Short. “What tenants want is the reassurance that everything is available if they choose.” Before they agree to move in, many super-prime renters want to put their own stamp on a property, especially if they plan to live in it for a year or two.

“Families taking a house for three years or more frequently want fresh paint, new carpets and new curtains,” explained Short. “They want it to feel like theirs.”

Tax perks and ‘lily-padding’ lifestyle

Given the costs of renting — and in some cases redecorating — a rental property, an obvious question is why these super-prime tenants don’t just buy a place. Huybrechts said the issue is value for money. Most super-prime renters would be liable for the very highest stamp duty rates, which would work out at up to £190,000 for every £1m they spend.

“These tenants can secure the property they want, without paying any stamp duty, or future capital gains and inheritance taxes in the UK, and they can keep their lives flexible, fluid and transitional moving across the globe while staying at different trophy rentals,” he said, describing an itinerant lifestyle hopping from one hotspot to the next known in the industry as lily padding.

Gordon Ramsay paid £12,000 a month to avoid the dust while his family home in Wandsworth was being renovated

marcorubino - stock.adobe.com

This is a highly secretive and privacy-conscious corner of the property market, where agents must often sign non-disclosure agreements before being permitted to even know who they are acting for.

Around half of super-prime rentals never make the property portals, said Sara Ransom at Stacks Property Search, and are instead discreetly let off market. “Its been a massive increase in the last few years, due to the increasingly low levels of stock,” said Ransom. “There’s really no need for agents to list property at this level.

“And owners of properties in this bracket are reluctant to go public with the detail of their homes, especially interiors.”

Extreme renovations

Naturally at this end of the market agents must be prepared to expect unexpected requests from some very uncompromising tenants. “For a very famous actress, we had to make a house as paparazzi-proof as possible,” said Nightingall, who oversaw changes such as installing sheer blinds on every window to prevent photographers from peeping in.

“For a professional athlete, we had to have the kitchen and fridge stocked with a very specific selection of food and drinks from Wholefoods before arrival.”

On occasion super-prime tenants will make significant alterations to a property. “One client wanted a private gym installed in one of the bedrooms,” said Nightingall. “He bought thousands of pounds’ worth of gym equipment, had the bedroom room converted for the duration of the stay and then donated the equipment afterwards.”

“We’ve experienced tenants requesting kitchens be converted into walk-in shoe cabinets”

Huybrechts

And there was Huybrechts’s client who was travelling with an extensive collection of footwear and had no need for a kitchen. “We’ve experienced tenants requesting kitchens be converted into walk-in shoe cabinets, with the kitchen cabinetry converted into bespoke shoe storage,” said Huybrechts.

“We’ve also experienced a tenant requesting the internal swimming pool be converted into a sunken cinema lounge with bespoke sofa suites installed into the pool area to look up at the cinema projector screen.”

On the subject of home improvements, one of Short’s clients requested the installation of Japanese toilets with heated seats, built-in bidets, and warm air dryers.

A footballer wanted a central London rental with 15 parking spaces. “One set of tenants even installed a full exotic animal menagerie in the basement, and we’ve had a tenant report paranormal activity that they wanted rectified,” said Short. “At this level, no two days are quite the same.”