Glentree nursing a £50,000 per week rental enquiry – has the market gone completely nuts?

It looks as though the rental market, at the higher end, has gone completely ‘nuts’. The reason being that, believe it or not, we are presently trying to find a suitable super, luxury mansion for an illustrious uber tenant to use for only a three months at, wait for it, an eye-watering rent of £50,000 plus per week.

To be honest, this reflects a new trend amongst certain foreign international clients who, in some cases, would prefer to pay an obscene rent, rather than purchase a property.

As they say, ‘beware of unintended consequences’! The legacy of the hapless former chancellor, Mr. Osborne and his draconian Stamp Duty impositions, has meant that instead of purchasing a substantial mansion in London for, let’s say, a five year stint, which otherwise would have cost 20% of the purchase price to buy and then sell, some wealthy clients are choosing to use the money instead, as rent.

By doing so this denies the Revenue the Stamp Duty Receipts, which it would otherwise have received and it is a crafty way for these clients to get around this penal tax and can you blame them? Ordinarily, had this been a purchase rather than a rental, the Stamp Duty levy would have been in the order of £5million, which is no trifling sum.

Up until recently, the highest weekly rent precedent in the north west London district, has been circa £25,000 per week, which represents a yearly commitment of over £1million a year and therefore, to double this figure is worthy of comment.

Glentree habitually organise the vast majority of ‘big ticket rentals’ in this part of London and are only too happy to earn the money, which serves to supplement the substantially lower fee revenues from the sales of luxury mansions in the area, as a direct result of these fiscal changes.

Another way around the tax wall is for prospective purchasers to buy shares in offshore companies which own a UK mansion and therefore, save a significant amount of Stamp Duty.

With the housing market being subdued, is it no wonder that we are hearing ‘howls’ of protest from the high street retailers as consumer spending becomes reduced. This has a knock-on-effect by suppressing UK growth, which is so important in the post-Brexit era.

Whilst the present Chancellor maybe ‘nursing’ some unexpected gains in Stamp Duty Receipts, this is all ‘fine and dandy’ but, at what cost if you take the holistic view?

Mr. Hammond, there is no point ‘gaining on the swings, if you lose more on the roundabouts’.