The top end of the lettings market in the key Home Counties area in England is picking up thanks to tax changes and greater flexibility from landlords, according to new research.
Both supply and demand have risen as higher purchase costs at the top end of the sales market has made buyers increasingly price sensitive, says the latest analysis from real estate firm Knight Frank.
The report, which looks at the super prime sector of £15,000 plus a month in the counties surrounding London shows that the number or properties available for rent has increased by 56% so far in 2016 compared to last year.
The number of viewings conducted above this level by Knight Frank offices has also more than doubled year on year, while the number of tenancies agreed in 2016 is comfortably higher than in both 2015 and 2014.
‘When you consider that the stamp duty on the purchase of a £10 million property in the Home Counties is £1.1 million, rising to £1.4 million if it is a second home or additional residence, that’s equivalent to more than three years rent,’ said Jemma Scott, partner in Home Counties Lettings.
She pointed out that the recent increase in stock levels has also resulted in greater negotiations on the part of tenants. In some cases this has led landlords to be flexible in terms of rents.
‘This flexibility can make renting look like an increasingly attractive option, although best-in-class properties, which are in a ready to move in condition with the latest fixtures and fittings are holding their value,’ she added.
The super prime lettings market in the Home Counties is concentrated on a relatively small number of areas primarily in Ascot, Virginia Water, Cobham and Esher, and there is a strong correlation between the market and proximity to international schools such as ACS Egham, ACS Cobham and TASIS, the American school, with education a big driver at the top end of the market.
Scott also explained that try before you buy tenants who want to get to know an area before committing to a purchase are another key source of demand.
‘The Home Counties are often the first destination for individuals moving out of London, while excellent transport links back to the capital and the wealth of outstanding schools mean they’re also favoured by international tenants looking to relocate to the UK, attracted by the abundance of green spaces and a vibrant social and sporting scene,’ she concluded.
