London’s Prime Agent Knightsbridge Prime Property Predicts rent price increases of 8% in 2023.
Knightsbridge Prime Property alludes to a further increase in prices within the rental market as demand remains high and the quality stock remains low in volume.
One of London’s prime central London lettings agencies is predicting continuous growth throughout the prime lettings market of properties priced from £2,000 per week to £50,000 per week, Knightsbridge Prime Property achieved a new record for their landlords in 2022.
The demand, says founder and Managing Director Raj Gill, is not likely to decrease as prices continue to soar due to the lack of high-end quality stock. This is a good sign for the London economy, and its a supply and demand issue.
“We see it repeatedly; throughout 2022 we achieved above asking price offers on many of our properties. Superior, prime properties, especially of familial size, are rare, and tenants know spending time negotiating when the market is this quick will only allow for other HNWI to swoop in and secure the property first.” - Raj Gill
Q4 of 2022 saw enquiries rise by 23% for rental properties compared to the previous year. Francesco Gamba, Head of lettings at Knightsbridge Prime Property, comments on his experience of increased demand from affluent tenants, resulting in his best year since joining the firm 5 years ago.
“Although the covid period did not bring the rental demand to a complete halt, the increase in rental enquiries we’ve received and tenancies we have secured during the recovery period of 2021, including up until now, has been most notable”.
The boutique PCL agency has recorded at least a 20% increase in the volume of deals since the pandemic and achieved prices on average 10-15% higher. The firm's value of rental deals exceeded £10M in the last year alone. It seems as if the lack of quality stock has resulted in higher prices being met in order to secure the scarce number of stand-out properties that are readily available.
With interest rates rising at the fastest rate in 27 years, this will undoubtedly affect a portion of the sales market as some buyers temporarily hold off their search to investigate future market conditions. This only furthers the rental agenda for overseas tenants in particular, as many potential buyers seek to rent for a matter of months in order to be fully informed when making a large purchasing decision.
Are sales prices on the move after a flat few years?
Internal research carried out by Mayfair-based agents Knightsbridge Prime Property shows their distribution of buyers evenly, demonstrating a mix of investor enquiries and end-users like families. No end-user will rush to buy a home if it is not the right property for them, often taking months to find their dream property, in which case renting during this period is extremely likely.
On the other hand, fully cash buyers looking to invest will strike gold come the middle of 2023 as a slight reduction in sales prices is not improbable. Overseas buyers, prevalently from the US, China and India, seek the golden postcodes with a heavy focus on Mayfair. Knightsbridge Prime Property comments on Mayfair as one of the ‘places to be in 2023’ with the highest volume of new developments in the last 12 months compared to any other prime London location. Cash buyers can choose Mayfair Park Residences, Mandarin Oriental, 77 South Audley Street. 21 Grosvenor Square and 1 Grosvenor Square in Mayfair alone.