Mayfair Market Report April 2010
Peter Wetherell is, without doubt, the foremost expert of the property market in Mayfair. His high-end Real Estate company has been the premier boutique brokerage in the area for over 25 years. Peter writes a regular report on the market.
FIVE FOLD INCREASE IN VOLUME FOR Q1/10 VERSES Q1/09
WHAT A DIFFERENCE A YEAR MAKES
With apologies to the Tony Bennett song "What a Difference a Day Makes". “What a difference a day makes Twenty-four little hours Brought the sun and the flowers Where there used to be rain”
VOLUME UP BY 500%
The residential property market for Mayfair and all areas suffered through the weather in January and February however 1st quarter volume of sales where over 500% up on the virtual no market of 2009 when only 6 properties sold in the first three months!
The bulk of the market is still up to £5M but confidence has returned to the higher priced properties as buyers, who fear future inflation, seek tangible assets classes to replace cash in the bank.
The house market has been particularly strong with over £30M worth of Mayfair sales including a Grade II listed Georgian town house in Upper Brook Street just off Grosvenor Square which sold freehold in immaculate condition on an asking price of £7M with 3,862 sq.ft. of traditional décor. (Wetherell have sold a third of all Mayfair houses for the last 6 years)
QE VERSES INFLATION
In 1972 the Government increased the money supply by 30% which lead to inflation of 9.7% that year, 16.5% in 1973 and a more alarming 26.5% in 1974. This represented 52.3% in three years!
Today after a year of quantitative easing (with Bank of England base rate at only 0.5% the lowest in its 315 year history) all asset classes have re-inflated so the policy of QE is seen as having done its job. It is said that QE is different to “printing money” as the Government will sell back the bonds into the market “when the market recovers”.
For the prime residential property market of central London this is an important point as UK Ltd will need to work its way out of this recession. Investors will want to buy the bonds with a higher risk rate; sterling weakens and once again overseas cash returns to invest in “cheaper” property investments.
BITE THEIR ARMS OFF - OFFERS
Although we are cautious on the market ahead we also feel that prime properties will benefit - we are now back to being a seller’s market. Indeed vendors are currently turning down offers that only months ago would have been perceived as “bite their arm off” bids.
Where better to invest than Mayfair, geographically bounded, restrained by planning constraints and offering a finite resource. Recent enquiries have originated from Europe, Middle East, Far East, Russia and satellite States all seeking a safe haven for investing their cash and taking advantage of weaker sterling.
The frustrating aspects of the market are the lack of property available (there are still under 100 properties available in the market against a norm of 150-175) and consequently the volume of sales (obviously up on last year but nearly half of 2006 and 2007 volumes).
London is driven by the world economy and the prime property market is still driven by supply and demand.
NEW TO SALES MARKET
Modern trendy Mayfair is represented this month by
DUNRAVEN STREET (just off Park Lane). A newly refurbished 3 bedroom maisonette with 2,088 sq.ft at £2.25M.
ERSKINE HOUSE in Davies Street. Two newly released 2 & 3 bedroom apartments on the 1st & 2nd floors sold on new Grosvenor Estate leases of 20 years at £540,000 & £650,000.
Traditional Mayfair Mansions are currently in demand; Last month Wetherell launched one of Mayfair’s finest at £32.5M which is now under offer and this month we have launched:
PARK STREET. A Grade II listed corner house of 9,768 sq.ft. The house has a “Gothic” feel plus a 42 foot garden with the freehold available at offers in excess of £21M.
NEW TO RENTAL MARKET
Historically spring is always busy – this year proving no different. If Tenants want to secure new homes they must act decisively as good properties are snapped up quickly.
A 1st floor 2 bedroom apartment in Balfour Place (£1300 p.w.) was on the market for only 2 days before securing accepted offer.
Best news is that the “Company Let” is coming back and consequently a lot more relocation agents with enquiries for 2 beds up to £1300 p.w.
Rent Renewals on lets are now increasing with tenants wanting to secure renewals at existing rental rates (no longer pushing for decreases) and landlords pleased to renew at existing rental values to avoid a void period.
2 new properties –
MOUNT STREET. A 2 bedroom 3rd floor corner apartment above Purdey at £1,300 p.w.
ADAMS ROW. A newly modernised 2 bedroom 2nd floor apartment with private roof terrace at £795 p.w.
We now enter the spring market and an election period – watch this space.