The Rise Of The Ultra-Tenant

In the UK, we have long believed that home ownership is the ne plus ultra of the property world, and that renting is second best – merely investing in someone else’s asset. But there’s a demographic within which this idea is breaking down – and it’s at the most demanding end of the market.

Across the world’s property hotspots, ultra-high-net-worth individuals are choosing to rent rather than buy. “It’s a real trend and hugely up on a few years ago,” says Isabella Birch Reynardson, head of super-prime lettings at Savills Private Office. “Currently, the sky’s the limit – and fortunately, there are great properties that offer what applicants are looking for.”

At any point, one of these clients could buy a house in Notting Hill or Kensington for cash, but instead they want a home that’s as flexible as any other aspect of their life. Birch Reynardson sees many renters ready to spend a minimum of £25,000 a month – and the shorter the let, the higher the price. “These clients have multiple homes,” she says – so unnecessary hassle is not wanted. High-spec properties are maintained to the utmost standards, and clients are generally unencumbered by admin and maintenance issues, which can be dealt with by landlords and agents.

Unpredictable market forces are having an effect, too. “Interest rates aren’t yet where people want them to be, so some buyers are waiting,” says Birch Reynardson, who adds that this year’s elections – from the US and UK to India and France – may also be a factor. “We’re seeing some buyers choosing to sit and rent rather than buy,” says Louise Nicholson, Savills head of cluster for the Cotswolds and Oxford.

The pandemic underpins this phenomenon, says Birch Reynardson. “When the world was grounded, working from home took off. Now our clients are seemingly more fluid than ever.” As deluxe digital nomadism exploded, execs set up in super-prime London, Dubai, Milan, Monaco, Singapore and New York, where the phenomenon of “mega-renters” and “uber-tenants” was recently noted in the Financial Times. Across these hot zones, renters have had a growing range of exquisitely appointed apartments, both new-build and conversion, to choose from. They’re supported by full services, from concierges to catering, and happily, there has been enough stock to go round. “Some excellent apartments that were for sale are now up for rent, too,” says Birch Reynardson.

Why not just live in a hotel? Because clients still covet a degree of personalisation. “They love to sit with interior designers choosing beautiful fabrics, and they enjoy having their own art around them, too,” says Birch Reynardson. Seasonality is also a big thing. “These clients winter in warmer climates and come to London for the social season. They want to know that their clothes and a toothbrush are there.”

It’s the same in the countryside, says Nicholson: “Rental clients fly in, enjoy the season, then leave.” While some see their rental as a proper home, others use it strategically for business networking, and here the UK’s global centrality is key. “Geographically, we’re well positioned between the Americas and Asia,” she says.

A typical contract is 22 months, according to Birch Reynardson: long enough to create a sense of home, not long enough to become attached. This is a clientele that’s discreet, security conscious, off-market and young – with a surprising number of 26- to 35-year-olds at the forefront, including tech, gaming and fintech types. Might this also then be a generational shift, with millennials leading the charge?

The pendulum may well swing back towards the permanence of buying. But Birch Reynardson believes there has been an attitude change. “I’m sure we’re becoming a bit more like mainland Europe,” she says. “The British ‘Every man’s home is his castle’ idea is shifting as our lives become more mobile. The way we live can shift too.”

ISABELLA BIRCH REYNARDSON 
Head of Department, Super Prime Lettings, The Private Office

Pictures from top: the elegant reception room at Princes Gate, Knightsbridge; one of the five bedrooms at Walton Street, Chelsea; a modern reception room at Lyndhurst Gardens, Belsize Park; and the swimming pool and gym at Walton Street