Prime London tenants 'paying rent 12 months in advance'
A growing number of tenants in prime London are paying as much as 12 months' rent in advance.
This is according to letting agent E J Harris, which said wealthy renters are paying lump sums upfront in order to secure property in a fiercely competitive market.
The organisation said a normal year would see around ten per cent of tenants choose to pay for their accommodation in this way, but the figure has now jumped up to around one in five.
Elizabeth Harris, managing director of E J Harris, stated: "The dramatic rise in up front tenancy payments is driven by several factors. Stamp duty and mansion tax concerns have turned purchasers into tenants and so competition has risen for the best homes which has led to a rise in upfront bids."
She added that the prime London market is attracting a growing number of wealthy tenants from nations such as Russia, Ukraine, Nigeria and China who are happy to pay the entire rent for a tenancy upfront.
Ms Harris said the speed with which new properties on the market are taken has increased significantly, meaning there is an imbalance between supply and demand.
When it comes to the areas of London that are most popular for upfront rents, Mayfair, Belgravia, Knightsbridge, St James’s, Soho, Fitzrovia, Marylebone, Westminster, Chelsea and Kensington, were highlighted by E J Harris as the top ten.
Mount Street in Mayfair was revealed to be the leading address for this form of payment, with 80 per cent of tenancies paid in full. Dover Street, which is also in Mayfair, followed with 70 per cent of rents paid in advance.
Eton Place in Belgravia, Trevor Square in Knightsbridge and St James’s Square all have 60 per cent of tenancies paid up front.
Find out more about letting agency software30-March-15General Lettings News