20% of prime central London renters paying a year’s rent up front
PUBLISHED: 19:24 30 March 2015 | UPDATED: 15:06 31 March 2015
Marylebone and Westminster are among the top locations where renters are paying more than £200,000 up front to rent a property.
Since the start of 2015, more than £100million has been paid up front by tenants hoping to secure homes in some of London’s most desirable districts according to lettings specialists E J Harris.
The agent said that in an average year 10 per cent of prime central London tenants would typically choose an up front payment, while this year the figure has doubled to 20 per cent.
Elizabeth Harris, managing director of E J Harris said: “The dramatic rise in up front tenancy payments is driven by several factors. Stamp Duty and mansion tax concerns have turned purchasers into tenants and so competition has risen for the best homes which has led to a rise in up front bids.
“Alongside this the London lettings market has become increasingly international with a new wave of wealthy tenants from Russia, Ukraine, Nigeria and China who are happy to pay their rents entirely up front.
“Despite new lettings coming onto the market, the speed at which new lettings instructions are getting tenant offers has increased dramatically, so the number of available lettings properties is actually lower at the end of each week.”
The letting agent said that whereas in a normal year a home for let in one of central London’s top addresses would attract two or three bids, there are now as many as six or seven tenants to each property.
Mount Street in Mayfair, where the average weekly residential rent is £1,400, was identified as the location where this practice is most common, with more than 80 per cent of tenancies secured by up front payments, which has the knock on effect of driving up rental values.
E J Harris are currently marketing a three-bedroom mansion flat in Marylebone – another neighbourhood in the top 10 up front rentals chart, for £1,500 per week.
Should a prospective tenant wish to pay the full cost of the tenancy at once, they could expect to fork out a total of £87,000, including a deposit (equivalent to six week’s rent) of £9,000.
For this they can expect 1,427sq ft of living space with high ceilings and close proximity to Marylebone High Street.
The typical “up front tenant” pays in excess of £200,000 to cover 12 months’ rent on a two-bedroom West End apartment plus deposit. This figure does not include letting agent fees.
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