When a private residence in the Foster + Partners-designed redevelopment of The Whiteley in Bayswater, central London, is offered for rent, the homeowner can be confident it will be snapped up within 24 hours, according to agent Knight Frank.

Slice of luxury: prices at rental scheme Shard Place in London start at £3,000 a month for a studio

The £1.2bn redevelopment formally opened in April and includes 139 residences with access to the onsite Six Senses hotel and spa.

“As soon as a property comes up for rent, it’s gone,” says David Mumby, head of Knight Frank’s central London prime lettings business. “It was built for the homes to be sold, but we are seeing people who possibly invested in it a couple of years ago now renting them out because their plans have changed.”

It is a similar story in the even more prestigious Mayfair, with apartments at 1 Grosvenor Square and 20 Grosvenor Square achieving rents of more than £250/sq ft a year – some of the highest rates in London. This equates to £750,000 a year for a 3,000 sq ft, three-bedroom apartment. Anything over £200/sq ft signifies a “truly exceptional product”, says Mumby.

Luxury developments to hit the rental market this year include Shard Place, near The Shard at London Bridge. Prices at the build-to-rent development start at £3,000 a month for a studio and go up to around £8,100 a month for a three-bedroom apartment.

Daniel Daggers, property influencer and chief executive of super-prime agency DDRE Global, says his firm recently secured a £30,000-a-week rental deal in Mayfair and a £25,000-a-week deal in Marylebone.

I have several clients who are in rental properties while they work out where in the UK they want to be
Annabel Dean, Farrer & Co

He is searching for rental properties for three clients with budgets ranging from £10,000 to £50,000 a week, but says there is very little to show them.

In the super-prime lettings market, where properties achieve rents of more than £5,000 a week, the number of tenancies agreed in prime central London rose 15% in the year to May 2025, Knight Frank figures show.

At the same time, prime and super-prime homes in London’s prestigious neighbourhoods are struggling to attract buyers. Over the same period, the number of homes sold for more than £2m fell by 4%.

That fall gets progressively worse the higher up the market you go, says Mumby. There were 34 deals in London for $10m-plus (around £7m-plus) in Q1 2025, amounting to $590m (£440m), according to Knight Frank’s Global Super-Prime Intelligence report. The deal count is down by about a third on the same period a year earlier.

Big on BTR: Vertus has 1,137 luxury homes across three buildings in Canary Wharf

Economic and political uncertainty are driving this trend. At the top end of the market, the decision to scrap the UK’s non-domiciled tax system from April this year and to charge 40% inheritance tax on overseas assets has been met with a negative response from wealthy overseas investors.

The inheritance tax decision is now under review, but there is a fear some buyers will turn to other locations, such as Italy or Dubai, where the tax rules are more attractive to the super wealthy.

“The concern for international purchasers is ensuring they do not become UK resident, or do not become resident for very long, so they do not become subject to taxes, given that the non-dom exemptions are now greatly reduced,” says Annabel Dean, partner at law firm Farrer & Co.

Pre-cursor to buying

Renting instead of buying does not really solve this problem. However, Dean has noticed that renting has become more popular as a pre-cursor to buying, particularly with buyers being more discerning about where they buy and how much they pay.

“I have several clients who are in rental properties while they work out where in the UK they want to be and take the time to look at properties with a view to purchase, but these are the ones who are not concerned about avoiding UK residency,” she says.

The government has sucked out all the value by increasing stamp duty
Daniel Daggers, DDRE Global

“In general, most of my ultra-high-net-worth and high-net-worth clients who are not from the UK are thinking ahead to when they will terminate their UK residency. They might plan to stay here only for so long as it makes sense for their business or for their children’s education and then will leave.”

Exactly how many non-doms will leave the UK following the tax changes will not be clear for several years, but the latest data shows the changes have not prompted a mass rush to sell higher-priced properties. The number of new sales instructions for properties priced above £5m in prime central London was up 14% on the five-year average in the first six months of the year, according to Knight Frank. However, that was well below the 32% rise for the whole prime central London market.

Stamp duty rise

Another factor at play is the increase in stamp duty, which in October, for second homes, rose from 3% to 5% above standard residential rates. This means the buyer of an additional home worth more than £1.5m has to pay 17% in stamp duty.

Mumby says that against this backdrop, the advice being given to high-net-worth individuals and their families is not to put £10m into a UK home just now.

“Renting might be expensive, but a year’s rent doesn’t look very different to the cost of stamp duty,” he points out.

Hot property: apartments offered for rent at The Whiteley in Bayswater are usually snapped up within 24 hours

Daggers says concerns over house price growth have also created uncertainty for buyers. “Owners have had very little asset inflation since 2014, which was the peak, but we’ve seen the costs of owning, building and holding real estate increase,” he explains. “The government has sucked out all the value by increasing stamp duty.”

As owners fail to achieve their asking prices, some are instead opting to capitalise on strong rental demand. But Mumby suggests that as more sales stock moves across to lettings, rents could plateau towards the end of the year.

Knight Frank has already noticed some softening in pricing in the super-prime price bracket as more stock comes to the market. However, rental values in the £1,500-plus-a-week bracket rose 1.9% in the year to May.

One area of demand has been the return of US corporates moving staff to London – which had been on pause due to uncertainty ahead of elections here and in the US.

Jared Kilgarriff, lettings regional director at JD Wood, says the firm has been extremely busy since April sourcing stock with rents ranging from £2,000 a week to £15,000 a week on behalf of corporate clients. “The US tech firms and law firms love Notting Hill and Chelsea,” he adds.

Beyond London

Taking a national view, Savills’ head of residential lettings Amelia Greene says a shortage of rental stock is also being felt in sought-after locations outside the capital – with demand here more often driven by UK nationals.

Increasingly, this stems from a ‘try before you buy’ mentality. “Given the cost of buying – stamp duty and everything involved in sale and purchase – people want to make sure they are getting it 100% right,” she says.

Given the cost of buying, people want to make sure they get it 100% right
Amelia Greene, Savills

Recent deals Savills has struck include letting a five-bedroom family home in a village near Chipping Norton in the Cotswolds to a British family for £12,500 a week. They were looking for a second home in the countryside, where they could enjoy their weekends away from London and wanted a base in the Cotswolds with a view to buying something in the near future.

Meanwhile, a 9,500 sq ft detached family home on a private estate in Esher, Surrey, was recently let for £31,000 a month by a British family who plan to buy in the area in the next few years, but wanted their children to go to school in the area now.

Greene is also seeing increased appetite from ex-vendors to start letting their property out because they can’t achieve their asking price – but she doesn’t view that as a negative. “We could really do with some stock out there,” she says.

Case study: Canary Wharf

Purpose-built rental stock is proving popular in Canary Wharf, east London, where the residential focus has shifted solely to build to rent (BTR) to give it more control of its assets.

Its BTR brand Vertus was launched in 2021 and has 1,137 homes across three buildings: Newfoundland, 8 Water Street and 10 George Street. The homes are now renting for up to £10,000 a month.

Alastair Mullens, managing director of residential at Canary Wharf Group, says: “We are more than 95% occupied across our three live buildings and this figure has remained consistent for the past three years.”

A further 1,308 homes are under construction at 40, 50 and 60 Charter Street.

Demand is predominantly from UK nationals working in the area, but also includes residents from across mainland Europe and countries such as the US and China.

Mullens believes the market needs additional rental homes. He points out that analysis by Savills for Trust for London, which provides grants to organisations fighting for economic and social justice in London, shows 45,000 private rented homes were lost from the sector between April 2021 and December 2023 – a net reduction of 4.3%. “At the same time, London needs to build 88,000 homes a year, at an annual cost of £2.2bn,” he says.