Is the £1 million property in Mayfair headed for extinction?

Could it be that Mayfair’s £1 million properties are going the way of the Dodo?

If predictions from leading local property experts are correct, it could well be the case. Mayfair’s number one estate agent, Wetherell, recently released a report that featured data collected by market intelligence group Dataloft. Within it, based on historical transactions throughout 2014 and 2015, predictions are made that there will be no property priced at £1 million or less by as soon as 2018. As global demand rises and outstrips the local supply, prices are being driven skyward in this hugely desirable part of town. As such, only a small percentage of properties available are currently priced below 7-figures, and the million-pound-property is set to all but disappear over the next two years.

The disappearance of Mayfair’s £1 million property

Dr Mark Armitage says he was fired for determining a triceratops like this one was in Montana 4,000 years ago photo/Houston Museum of Natural Science via wikimedia commons

According to the research, there were no properties priced at less than £750,000, and the vast majority of properties sold (49 per cent) are now priced in the £2 million to £10 million bracket. Furthermore, 11 per cent of properties sold exchanged hands with a price tag of more than £10 million.

Peter Wetherell, CEO of Wetherell, believes that prices will only rise in coming years as Mayfair gains traction as the most desirable residential neighborhood in Prime Central London. “Over the next 12-24 months apartments priced below £1 million and houses below £2 million will, like the Dodo, become extinct,” he says. “This reflects the continuing upward surge in resi-values in Mayfair, a reflection of both global demand and short supply, and also the large increase in super-luxury apartment schemes being built and sold in Mayfair over the last few years. Mayfair is the new Knightsbridge you could aptly say, the fashionable place for luxury property.”

The report revealed that 95 per cent of homes sold were priced between £1 million and £2 million mark, and that only a small number of properties were priced between £950,000 and £1 million. There have been a number of factors that have contributed to the astronomical price growth in the area, including the rising number of foreign investors putting money into the local housing market. Figures reveal that in London’s West End, over 60 per cent of the residents are born overseas. Many of these residents are international students hailing from ultra-rich families, who are in Mayfair to take advantage of London’s schools along with PCL’s luxurious living. What’s more, the average age of the Mayfair resident has lowered. Almost 60 per cent of residents are under the age of 44, occupying high paying jobs in finance and investing. With the young, rich and famous descending on this part of central London, prices are expected to remain strong this year, even if transactions slow ahead of the Brexit vote owing to what is known as the “Referendum Effect.” However, given that the world’s ultra rich now utter Mayfair in the same breath as places like Monaco and Singapore when it comes to places to live and own property, it’s popularity is not set to wane any time soon. In fact, the housing market looks to remain steady in the coming years, according to Peter Wetherell, who comments: “We may see a slight uplift, but it’s effectively “more of the same”. Supply and sales volumes are less than in past years, but values are stable and rising gradually. Mayfair is like a strong ocean liner sailing in a protected fjord, out in the wider (global) oceans things might be turbulent and stormy, but protected within our anchorage the Mayfair market is reassuringly calm and stable. As our 30-year data index shows this stable long-term rise makes for an outstanding return on investment. Back in 1985 virtually no homes were valued at over £1 million, thirty years later and virtually no homes are valued below £1 million – it’s a clear indication of the outstanding value that Mayfair property offers investors.”

Author: Kayleigh Stubbs