Three doors from the prestigious In and Out Naval and Military Club, minutes from Pall Mall, a 30,000-square-foot Neo-Georgian building – 42 times the size of the average London property – is undergoing a 30-40 million dollar transformation. pound sterling.
The seven-story Grade II listed building at 7 St James’s Square was built in the 1670s and renovated by Edward Lutyens in 1911. When completed in late 2023, with interiors by Martin Kemp, the house will be a single family home with 12 bedrooms , a 1,000-square-foot gym, a movie theater overlooking an eight-car showroom garage, and – rare in these areas – a decent-sized backyard. It will also be staffed with chambermaids, housekeepers and a security team.
It would cost around £ 150million to buy the house, said Dean Main, managing director of Henigman, which is developing the property. But it is not for sale; Main plans to rent it out for around £ 100,000 per week, which places it among the most expensive long-term rentals ever in the UK.
“The rental deposit alone will amount to millions of pounds,” adds Main, whose largest investor in the project is CPI Group, the real estate company founded by Czech billionaire Radovan Vítek.
Main expects a family to occupy 7 St James’s Square for at least three years, as is typically the case in London’s super-prime rental market – a sphere agents define as starting at 5,000 £ per week. High-end properties are scarce, although Isabella Birch Reynardson, head of luxury rentals at Savills in central London, knows of two houses, both off-market, available for around £ 100,000 a week.
London’s super-prime rental market was hit by the pandemic early last year. Suddenly there was no corporate relocation, no very wealthy international students. “At the high end, rental requests fell by around 70% in March of last year. [compared with the same month in 2019]», Explains Marc Schneiderman of the real estate agency Arlington Residential.
But Jo Bishop, buying agent at Property Vision, says that relative to sales, the luxury rental market has recovered quickly. “[Sales fell] 40% between March and May 2020 in the high end, ”she says. “Rentals have reaped the rewards, as those with short or uncertain schedules have chosen to rent. ”
“Covid has increased the need for full flexibility – with the variations and restrictions constantly evolving, it becomes difficult to make longer-term plans,” says Main, who is confident in the health of his very high niche range. Marlet.
“There is also, quite simply, a serious lack of offer in this very high end because developers mainly build to sell. A handful of top-notch apartment buildings hit the market this year, available for rent, and I predict this trend will increase dramatically over the next decade.
The average price of super-prime rents has remained fairly stable over the past year – increasing 0.4% year-on-year in the second quarter of 2021. Nonetheless, Birch Reynardson says there has been competition for the good ones. properties. She cites a family house in Kensington which has just been rented, after several offers, for £ 6,500 per week, which is £ 250 more than asking price.
Stamp duties and uncertainty are two of the main factors driving the super-rich to rent rather than buy in London. For a foreign buyer buying a non-primary residence, a £ 20million home will result in a stamp duty bill of around £ 3.3million. “You will need to keep your property for at least four years to recover your stamp duty and other costs,” says Richard Rogerson, managing director of the buying agency RFR Property.
Many see the 2014 stamp duty reforms and the 2016 Brexit referendum as turning points for London’s prime rental market, as wealthy potential buyers increasingly choose to rent rather than engage in a purchase. In the first quarter of 2014, the maximum rent recorded in London was £ 12,500 per week, according to Knight Frank. In the first quarter of 2019 it was £ 60,000.
Renters are also looking for the lifestyle benefits and flexibility of being a tenant rather than an owner. “Their take is ‘London works for me today, but will it be good for me tomorrow?’ Says Main.
Schools are a key driver, says Birch Reynardson. “We have seen many deals for family houses costing over £ 10,000 per week. But then the kids can go boarding in a few years and it’s time to change rooms and move from the rented family home in Notting Hill to a remand center in Belgravia or Mayfair, as parents will be traveling regularly. Again.”
Corporate rentals are also coming back. David Wilcox recently moved from New York to London with his wife and three school-aged children. They agreed to a £ 5,000 per week rental for a five bedroom house overlooking a Kensington garden square. Proximity to Thomas Kensington’s school was an important factor.
“I needed to convince my family to move the continents in these uncertain times, so the property had to tick all the boxes,” says Wilcox. “We will be here for at least two years and wanted a safe neighborhood, large bright rooms and a completely redecorated house.
Some tenants just want to change. Schneiderman has a client who lives in a townhouse in Regent’s Park and, during the lockdown, rented a house three miles away in Highgate, “so his family could have more space and a swimming pool,” says he. “They moved out of their own house, took on a one-year lease and spent around £ 600,000 on the rental. But they thought it was money well spent.
What you can hire for. . . .
£ 5,000 per week A six bedroom stucco fronted house in Kensington Gate, South Kensington, across Cluttons.
£ 9,231 per week A six bedroom house in Barnes, South West London, with an acre garden, across Berkshire Hathaway Home Services London.
£ 35,000 per week A five bedroom Finchatton designed penthouse with roof terrace at Mayfair House near Grosvenor Square. Available via Savills.