Renters snap up London homes after Whatsapp tours

Wealthy foreigners are willing to spend as much as £25,000 each week on a luxury London home - without even bothering to set foot inside the country, let alone the property.

Luxury estate agents claim that foreign demand for prime London property is so great that their high-end clients are shelling out huge deposits for rental homes after a quick tour via WhatsApp or Facetime.

One “global superstar” opted to rent a seven-bed home with staff quarters overlooking Regent’s Park after a 40-minute iPhone tour.

Another investor from South Africa rented a £12,000 a week, seven-bedroom Hampstead mansion with a private cinema and spa after a FaceTime tour.

luxury london property

High profile, top secret

Improved smartphone capabilities are transforming property sales and letting, and wealthy clients with money but little time are taking advantage of technology to rent properties without leaving their home countries - or their superyachts and private jets.

The properties in question are valued in the millions of pounds, and understandably, the clients - think along the high profile lines of Madonna or Nicolas Cage - wish to remain anonymous, and not create excitement by visiting London personally. They are also aware that their famous name might push up the price tag - it appears even the world’s wealthy like to save a bob or two.

Since the government increased stamp duty on homes owned by offshore companies, wealthy clients are willing to shell out huge amounts of money on rent rather than buy. A £30m home would incur a stamp duty of £5m, for example. Renting also allows wealthy individuals to retain a semblance of privacy, since the government is preparing to force the declaration of property owners’ identities. Recent figures show that some 200 foreigners are opting to pay £218,200 in tax each year rather than announce which of London’s mega-mansions they own.

Property data service LonRes found recently that the number of UK homes let for more than £5000 a week in the first six months of this year increased by 21 percent over the same period in 2016. The increase comes at the same time prime central London properties experienced a drop in sale prices. Homes priced between £2m and £5m dipped by 8.4 percent in the second quarter of 2017, compared to the same time last year. Homes valued over £5m fell by 3.2 percent.

luxury london home

A shaky outlook for multi-million pound London homes coupled with large buying costs have resulted in a knock-on effect which is benefitting the top end of the lettings market - renting for four or five years could work out to be roughly the same as the cost of stamp duty on a similar home, which leaves buyers in a good position to buy when the outlook is clearer. And just like people renting homes at a fraction of the cost, these tenants will save money on maintenance and other costs which fall to the responsibility of the home owner.

Stamp duty on homes selling for more than £1.5m is now 12%, a figure which will rise to 15% upon the purchase of a second home. Stamp duty is a huge source of income for the government, which earned £7.3bn last year - and almost half of that came from London.

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