London’s super-prime rentals were a runaway hit in 2017 as potential buyers put off their home purchases to tide out market uncertainties.
Over the last year, there were 137 leases signed for a weekly rate of £5,000 (US$7,003) or above, a 34% increase compared to the figure of 102 in 2016, according to a Knight Frank report released Monday.
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Also, 20 leases of £15,000 (US$20,984) and more per week were transacted last year, a record number that almost doubled the 11 registered in 2016.
Further, during the third quarter, 49 super prime residences were rented out for more than £5,000 per week, the highest level for a single quarter in 12 years, according to the report.
Luxury rentals benefited from the slowdown in the sales market at the highest price points, according to Tom Smith, head of super prime lettings at Knight Frank.
"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," Mr. Smith said in the report.
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Super-prime renters also opted for longer lease terms compared to the prior two years, according to the report. In 2017, the average length of £5,000-plus leases was 589 days. By comparison, it was 548 for 2016 and 528 for 2015.
However, luxury rentals are expected to lose some momentum moving forward as the sales market begins to recover. Average prices for homes sold above £10 million (US$14 million) rose 0.2% in the year to January 2018, the first annual increase in almost two years, according to the London-based global real estate consultancy.