Even though the U.K.’s prime sales market has recovered significantly over the last six months, luxury rentals in the home counties remain competitive, according to a new Knight Frank report.
During the six months leading up to May, there was a 13% increase in prospective tenants with a monthly budget of £15,000 (US$19,130) compared to the same period a year ago, according to the report released Tuesday.
Tours of £15,000-plus-per-month rentals by Knight Frank more than doubled during the same period of time, according to Knight Frank.
Home counties refer to London’s surrounding areas, including Ascot, Beaconsfield, Cobham, Esher, Guildford, Henley, Sunningdale, Virginia Water and Weybridge.
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"Increasingly, tenants are renting in order to ‘try before they buy,’ illustrated by an increase in tenancy agreements that include an option to purchase," Jemma Scott, partner at Knight Frank Home Counties, said in the report. "This allows families to settle in the area before committing to a full time move."
Luxury home counties rentals are often the first destination for individuals moving out of London as well as international wealthy families looking for good private schools.
And rising demand came amid a reduction in supply in this thin market. At the end of May, home counties had 21% fewer super-prime properties available for rent, compared to the same period in 2016, according to the report.
The decrease in inventory is mainly attributable to an improving sales market, as "accidental landlords," who had held off on selling their properties in a slow market and rented them out instead, have largely switched back to the sales market.
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The number of £5 million-plus (US$6.38 million-plus) sales completed across the country increased 38% so far this year, compared with the same period of 2016, according to Knight Frank.
Knight Frank didn’t provide the absolute numbers of prospective super prime renters, active listings or super prime sales.