London’s prime rental market has ballooned in the first half of 2025 as the wealthy opt to rent luxury homes rather than purchase them in a shift reshaping the capital’s most exclusive postcodes.
According to new research from Beauchamp Estates, 1,588 rental deals were agreed for properties commanding more than £1,000 per week between January and June, compared with 559 in the same period last year.
That represents a 154% increase, lifting total rental income in the sector to £82.8 million, up from £32.6 million in 2024.
Of this, £58 million was generated by apartments and £24.8 million by houses. Long-term agreements accounted for 93% of the lettings, though short-term deals have grown to 7% as tenants from the Middle East returned to the capital in greater numbers this spring and summer.
PRIME CENTRAL LONDON
The data highlights how prime central London’s lettings market has become a pressure valve for international wealth, domestic tax policy and changing global mobility.
Beauchamp identified four main forces behind the surge: an influx of wealthy American, Middle Eastern and Western European tenants; non-domiciled residents selling up and renting while relocating to Dubai, Monaco and other tax-friendly jurisdictions; the deterrent effect of higher Stamp Duty on luxury purchases; and shrinking supply as traditional landlords exit the market.
Pic Credit: Beauchamp Estates
The result has been a scramble for stock and record rents. The most expensive house letting of the year to date was £28,000 per week for a mansion in Marylebone, while the priciest apartment secured £15,000 per week on Wigmore Street.
Mayfair and Marylebone led the activity, accounting for 37% of all prime deals, followed by Belgravia and St James’s (19%) and Notting Hill (14%).
WEALTHY FAMILIES
Houses continue to command a premium, with long-term rents averaging £2,679 per week, compared with £1,842 for apartments. Larger properties are being targeted by wealthy families seeking space and privacy, with 40% of international tenants choosing houses over flats.
Pic credit: Dimitrios Sofianopoulos and Beauchamp Estates
Behind the surge is a combination of push and pull factors. The weaker pound has made London property more attractive to dollar-based tenants, particularly from the US.
At the same time, wealthy residents have been deterred from buying by high stamp duty and the uncertain trajectory of UK property taxation, instead choosing to rent until the fiscal outlook becomes clearer.
TIGHTENING SUPPLY
Supply is tightening. Many buy-to-let landlords have left the sector in response to higher borrowing costs and regulatory changes, while some owner-occupiers – reluctant to sell at reduced prices – have become “accidental landlords”, renting out their homes rather than lowering asking prices.
Pic credit: Dimitrios Sofianopoulos and Beauchamp Estates
Developers, too, are discreetly putting turnkey properties onto the rental market, in some cases choosing to secure income streams rather than cut sales prices.
The prime lettings surge is a reversal of the trend seen in the aftermath of the pandemic, when international travel restrictions suppressed demand for London’s most expensive properties.
OWNERSHIP FLEXIBILITY
The rebound underlines the capital’s enduring pull for global wealth – but also the increasing preference for flexibility over ownership among the ultra-rich.
Market analysts note that London is not alone in seeing this shift. Luxury rental demand has also been rising in Paris, New York and Dubai, driven by higher interest rates, currency arbitrage opportunities and shifting tax regimes. For London, however, the stakes are particularly high given the city’s reliance on international capital and the government’s ongoing review of property taxation.
Whether the surge can be sustained will depend in part on how policy evolves. If the government were to raise taxes on high-value homes further, analysts suggest more would-be buyers could opt to rent, pushing the lettings market even higher.
Conversely, a cut in stamp duty or clarity on non-dom taxation could tilt the balance back towards ownership.
STRONG INTERNATIONAL DEMAND
Chris Tinkler, Lettings Manager at Beauchamp Estates (Mayfair), says: “The has been significant growth in lettings activity across Prime Central London.
“During the first half of 2025 we have seen a marked increase in the number of letting deals completed compared to both 2024 and 2023, with total lettings volume increasing and the value of deals rising.
“The London lettings market is being driven by continued strong demand from international tenants, especially American, Middle Eastern and European tenants.
“In the short-let market this year we have also seen a spike in tenants from the Middle East coming to London to enjoy the spring and summer, a significant increase from last year when many visited continental Europe rather than the UK.”
DOUBLED IN SIZE
Jeremy Gee, Managing Director of Beauchamp Estates, adds: “The huge appeal of Prime Central London as a key destination for both short and long stays is evident, the luxury lettings market has doubled in size during the first half of 2025, compared to the same period in 2024.
“London’s luxury property market is hugely influenced by global political and economic shifts, rather than just domestic economic activity.
“Over the last 12 months the political decisions of President Donald Trump, Saudi Crown Prince Mohammed Bin Salman, UAE President Mohammed bin Zayed Al Nahyan and Israeli Prime Minister Benjamin Netanyahu have had a significant impact on London’s luxury residential lettings and sales markets, their decisions generating a wave of new international tenants and real estate purchasers in the UK capital.”
Main picture: Winnington Road,£29,500 per week
Pic credit: Tony Murray and Beauchamp Estates
