Overseas students paying £1,000 a week to rent in London
04-09-2012
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The Lettings team at agents W A Ellis says it is currently being inundated with High Net Worth students from all over the world.
‘Their tenancies are generally being guaranteed and paid for by their parents who are paying up to around £1,000 per week. We've had two properties where three students were bidding against each other. We do not believe that we will have any studio or one bedroom flats left for letting if this frenzy continues,’ said Lucy Morton, senior partner and head of lettings at W A Ellis.
‘It's not only students who are trying to get settled before the academic year begins. We have noticed an increase in enquiries in all levels of the market and many prospective tenants, particularly families who have avoided London during the Olympics, are now panicking to get settled before the school term begins,’ she explained.
‘Although there is a high demand for all rental properties, it is essential that they are priced correctly so that available stock lets in September rather than suffering extended voids. The Prime Central London lettings market has been affected by the Eurozone crisis, not least because there are now 40% less jobs in the City than in 2007 and rents have fallen marginally as a result,’ she added.
Meanwhile, on the sales front there has been increased interest in properties up to £2 million from overseas investors. ‘There is no doubt that the excitement and focus of the Olympics has increased interest in London from overseas investors, most notably in properties up to £2,000,000. These are classic investment buyers who are consciously purchasing below £2,000,000 to avoid the higher Stamp Duty threshold,’ said Richard Barber, partner in residential sales at W A Ellis.
He explained that as the consultation period with regard to the impending annual 'mansion tax' and capital gains tax charges on company held properties priced above £2,000,000 has now finished and the market awaits draft legislation which is due this autumn, it is obvious that many owners are reconsidering the structure in which their properties are held.
‘Whilst we have already seen some company held properties coming to the market as a direct result of the impending changes, we do not expect a glut and we believe that many will simply be transferred into individual's names rather than be sold. It certainly seems to be the government's wish that London property investment should not remain a tax free zone, particularly with regard to gains made during a continually buoyant market,’ said Barber.
‘The appetite for investment within central London, in spite of the above, is still apparent as evidenced by two recent sales during August, one being an unmodernised family house with a double garage in Knightsbridge and the other a charming double fronted corner property in the heart of Belgravia, both of which required full modernisation,’ he pointed out.
‘Both our sales and investment/development department have remained busy with enquiries for unmodernised property and the rates per foot attributed to such properties, once developed, remain ever increasing with some projecting figures in excess of £3,500 per square meter. Sentiment remains positive which bodes well for a strong market during the autumn period,’ he added.
