London's ultra-rich are paying as much as £40,000 a week to rent properties in the capital, as steep stamp duty bills and fears of tougher property taxes in the Autumn Budget deter many from buying, according to estate agents.
Trevor Abrahamson, boss of estate agent Glentree, said fear of higher levies was fuelling the rise in exorbitant rents. "We are agreeing deals on apartments and houses at £17,000 to £40,000 a week," he said.
"Many would rather own a home, but overseas buyers face stamp duty rates of as high as 19 per cent," Abrahamson added.
Stamp duty is a tax paid by buyers of property or land in England and Northern Ireland, calculated as a percentage of the purchase price. Rates rise sharply for overseas buyers and for those purchasing additional homes.
The Autumn Budget is the UK government's annual fiscal statement, typically delivered by the Chancellor of the Exchequer, in which tax and spending policy for the year ahead is set out.
Uncertainty deters buyers and sellers
Becky Fatemi, of estate agency Sotheby's International Realty, said speculation over what could be announced in the autumn had often been more damaging to the property market than the tax itself.
"In London, we have been seeing buyers and sellers hesitate because they simply don't know what the next fiscal announcement might mean for them," Fatemi said.
Sotheby's International Realty is a global real estate brokerage brand specialising in luxury properties.
The stamp duty maths
Stamp duty on a £20 million property bought by an overseas buyer as a second home comes to £3.7 million, enough to cover two years of rent at £40,000 a week.
A domestic buyer would face a £2.3 million stamp duty bill, which would fund more than two and a half years of rent at £17,000 a week.
Stamp duty bills and mansion taxes have been blamed for a sharp fall in house prices of up to 25 per cent in some of the UK's richest neighbourhoods.
