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Published On: Fri, Jan 19th, 2018

Market Alert: Mayfair Property at lowest price since 2014

Brexit, changes in law and increased supply: three factors which have dramatically impacted the Mayfair property market, slowing price growth and providing the opportune moment to consider investment in one of London’s most consistently desirable postcodes.

In the almost three decades that have passed since the year 1990, average house prices in London have tripled in a manner incomparable with the rest of the UK, a pattern many feared would never cease. Alas, amidst political uncertainty which occurred in sync with a significant shift from commercial to residential property throughout London’s Mayfair, homes within the top 5-10% price bracket are facing price decreases at an average of 15% below their peak, three years ago.

Grosvenor Square overlooking the Millennium Hotel London Mayfair
photo courtesy Millennium Hotel London Mayfair

In addition to Brexit uncertainty, an increase in stamp duty for second properties and those over £1M, a significant shift from commercial to residential properties and changes in financial regulations, which discourage large mortgages, have been influential in shaping the London’s prime property market. Whilst 2014 saw 20% of buyers in London accepting mortgage agreements four and a half times that of their income, the implementation of laws intended to ensure financial stability in the UK has since discouraged banks from lending at this scale.

However, this price decrease has not caused concern for the future of the Mayfair property market amongst industry experts, with Harvey Cyzer, Head of Knight Frank’s Mayfair Office noting that Mayfair maintains its position as ‘a world-renowned destination’ with ‘factors such as currency fluctuation enticing a wide range of buyers to the market.’

This is corroborated by Mayfair estate agents, Wetherell, who commented that ‘over the past 35 years we have seen Mayfair flourish and we haven’t seen a better time for investors in residential property for many a year. Whilst the price of property is low, the volume remains high, and in an area as renowned as Mayfair, opportunities such as this don’t last long.’ Strike while the iron’s hot and make the most of the opportunity to invest in property with a rich history as a valuable long-term investment and an equally prosperous future.

Compromised of over 5100 permanent residents with more than 42 nationalities, Mayfair is an international hub for those seeking a high standard of living; population density in Mayfair is currently recorded at 39.3 people per hectare compared with an average of 100 throughout the Westminster borough. In addition, it boasts a short average commute, easy access to luxury retail, culture and cuisine and a ‘village’ feel in a central location. These factors make Mayfair properties attractive, particularly given their scarcity. On average, only 110 are sold per month.

From an investors perspective, Mayfair is a safe bet. It has seen a 72% rise in average price per square foot, compared with 65% across prime central London as well as an increased demand for private rental. This is good news for buy to let buyers, with gross yields remaining at a consistent rate of 3% following the economic downturn. Since 2004, Mayfair property values have consistently topped every other asset class, aside from gold. This includes property throughout the rest of prime central London and the FTSE index.

photo David Holt

Mayfair has seen something of a rebirth over recent years, with a significant movement from commercial to residential properties. At present, there are some 160 apartments under construction and set to enter the market. Assisting Mayfair in its ability to modernise are the New West End Company, The West End Partnership, London Luxury Quarter, Westminster City Council and the Neighbourhood Forum who work collectively to ensure the area remains a top global destination. This is sure to be aided by the opening of the Elizabeth Line in 2018, driving increased interest and footfall to the area.  

With Mayfair property prices performing better, long-term, than any other prime London market, investors should consider this the opportune moment to further enhance their portfolio with a Mayfair addition.

London’s Top Property Area ripe for the picking

With an unquestionable track-record as an area of great investment, those with an interest in property and the ability to enhance their current property portfolio would be wise to consider Mayfair given its standing in the prime property market and current price-decreases.

Homes in the district are currently sat at an average of 15% below their peak, three years ago, causing industry experts to suggest that there has not been a better moment to consider investment in the last three decades. Mayfair estate agents, Wetherell, commented that ‘over the past 35 years we have seen Mayfair flourish and we haven’t seen a better time for investors in residential property for many a year. Whilst the price of property is low, the volume remains high, and in an area as renowned as Mayfair, opportunities such as this don’t last long.’

In the past three decades, house prices in London have tripled, with an almost continuous pattern of growth enforcing a trend that many prospective home owners and investors were unconvinced would ever come to an end. However, amidst Brexit fuelled uncertainty, increases in stamp duty for second home owners and those investing in property over £1M, increased supply in housing given a significant effort to shift from commercial to residential property and changes in financial regulations which have discouraged large mortgage lending, a downfall in prices has occurred and is affecting properties In the top 5-10%, most significantly.

Mayfair has recently undergone a rebirth in a manner similar to that witnessed in neighbouring Knightsbridge. In compliance with the ‘Considerate Contractors Scheme,’ implemented by the City of Westminster, it has seen the addition of 410 homes over the course of the past decade, with some 160 apartments currently under construction. What sets Mayfair apart from other prime London locations? Arguably its ability to modernise, adapting to social and political changes as necessary. From the Second World War, where large properties were converted into offices for matters of preservation, to the 21st century, where its apartments appeal to its increasingly youthful, affluent and educated clientele.

Mayfair promises long-term investment potential with a rich history to back it up. It has seen a 72% rise in average price per square foot, compared with 65% across the rest of prime central London. Demonstrating stability in the buy to let market, gross yields have remained at a consistent rate of 3% since the economic downturn, with a noted increase in those seeking to rent. In addition, Mayfair property values have consistently topped every other asset class since 2004, aside from gold. This includes property throughout the rest of prime central London and the FTSE index.

With a make-up of over 5100 permanent residents of more than 42 nationalities, Mayfair maintains its position as an internationally renowned location for those seeking a high standard of living, access to good schooling, a rich cultural scene, short commute distances and great long-term investment opportunities. The coming of the Elizabeth Line in 2018 is only set to enhance the area’s desirability, driving further interest in the area. It’s a buyer’s market in Mayfair and now is the time to invest.

Author: Blair Collins-Thomas

About the Author

- Outside contributors to the Dispatch are always welcome to offer their unique voices, contradictory opinions or presentation of information not included on the site.

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