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5.1%
200%
£3.8m
£1,323
Average house price rise in Prime Central London in 2013
Rise in exchanges in 2013 for our Chelsea team
Average house price in Knightsbridge
Average weekly rental value in Kensington
29%
51%
Rise in number of viewings for Chelsea lettings team in 2013
Rise in lettings applicants for our Mayfair team in 2013
FIGURE 1: KEY MARKET INDICATORS
INSIDE THIS ISSUE… chestertonhumberts.com
Source: Chesterton Humberts Research
MEET THE TEAMS
MARKET COMMENTS
2 3
PROPERTIES
OUR NETWORK
6 8
Your Teams & Market Comments Chelsea & South Kensington office Guy Gittins
Chelsea & South Kensington office John Humphris
Director Sales 020 7594 4745 guy.gittins@chestertonhumberts.com
Director Lettings 020 7594 4752 john.humphris@chestertonhumberts.com
Kensington High Street & Kensington Church Street offices Nick Carter
Kensington High Street & Kensington Church Street offices Corinna Digeser
Director Sales 020 7368 3046 nick.carter@chestertonhumberts.com
Director Lettings 020 7368 3035 corinna.digeser@chestertonhumberts.com
Knightsbridge & Belgravia office Debra Stroud
Knightsbridge & Belgravia office Anshul Raja
Director Sales 020 7201 2053 debra.stroud@chestertonhumberts.com
Area Director Lettings 020 7201 2063 anshul.raja@chestertonhumberts.com
Mayfair & St James office Ivor Campbell-Davys
Mayfair & St James office Erik Holmgren
Director Sales 020 7514 9100 ivor.campbell-davys@chestertonhumberts.com
Director Lettings 020 7514 9102 erik.holmgren@chestertonhumberts.com
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Debra Stroud & Anshul Raja Knightsbridge & Belgravia
Nick Carter & Corinna Digeser Kensington & Holland Park
A tale of two stories in essence sums up the Knightsbridge and Belgravia market. A short supply of stock in sales has resulted in a marked uplift in values throughout 2013 with the most desirable areas obtaining the best prices and in some cases achieving record rates and we believe that these values will be sustainable into 2014. On the other hand, an abundance of stock and limited demand have seen a correction in rental values at the upper end of the market in prime central London Q3 and Q4 saw the expected seasonal rise in demand that fortified the market against previous quarters. Knightsbridge and Belgravia remain popular with our overseas patrons and local residents alike for obvious reasons but from an investment point of view the area has always offered a secure investment for buyers and a safe home for its residents.
The last six months in the rental market has been a very competitive time for landlords. With an abundance of stock on the market, tenants are able to demand value for money, therefore rents have generally stayed level during this period. On a positive note Kensington has seen an above average conversion rate of 61.8% on tenancies renewing in the last 6 months with an average increase of 2.62%. Tenant demand is again dominated by foreign corporate tenants which account for approximately 70% of all lettings. The sales market remains strong as demand continues to outstrip supply. Overseas buyers continue to make up over 90% of all transactions, with a large proportion of them being investors looking to buy to let. There remains a significant lack of stock in the market, with good quality prime properties selling quickly and in many cases achieving record prices particularly in the £1m- £4m price range.
Guy Gittins & John Humphris Chelsea & South Kensington
Ivor Campbell-Davys & Erik Holmgren Mayfair & St James
Off the back of an exceptional 2013, the Chelsea sales market shows no signs of slowing down. We have seen record levels of activity, especially below £2 million as residential buyers are returning back to the market for the first time in five years, encouraged by easy access to mortgage financing. These buyers are adding to the always present overseas buyers looking to invest cash into London property for long term rental investments. Prime streets continue to be in high demand however recently we have seen stronger price increases in areas previously considered to be non-prime.
The second half of 2013 saw positive results in both sales and lettings. A short supply of stock within the sales market has pushed prices upwards whilst the lettings market stabilised after some fluctuation in the first two quarters. Buyers are still digesting the changes in Stamp Duty, Envelope and Capital Gains taxes and as we write, awaiting news of the new Capital Gains taxation changes, creating some uncertainty. However, as always, demand still outstrips an ever decreasing supply and good property, sensibly priced, is achieving record results as canny buyers snap up what stock there is. In particular, the sub £2m market has been increasingly busy with high levels of both international and home-grown buyers. Lettings saw a very strong third quarter with a record number of transactions, mainly driven by wealthy overseas students and single professionals. Tenants are increasingly looking for longer initial terms and it has not been uncommon to see two or three year periods in contracts. We have also started to see an increase in corporate demand again after a significant reduction in wake of the faltering economy. This trend is set to continue with analysts revising and increasing predictions for UK economic growth in 2014. Moreover, with rents and prices relatively low considering Mayfair’s place in the world at large and with increasing internal investment, more and more British buyers (both residents and investors) are being attracted from Kensington, Chelsea and Knightsbridge
2013 has experienced a mixed picture in the rental market with an increase in stock levels and a resulting price correction in the summer months as a result of tenants serving notice in order to buy rather than rent. Stock levels have equalised in the latter half of the year but demand is slowing after the peak activity of the summer months. The outlook for 2014 is promising with positive economic news and business growth forecasts which typically feed through into an upswing in Corporate Relocation activity particularly in the New Year.
Research ❖ Land
Registry data shows that in the year to September house prices across London increased by 9.3% to a new high of £393,462, meaning the average price of a London home is 135.5% higher than the national average.
❖ The
latest sales volumes statistics (July) show that the number of sales above £1m in London increased by 44% in comparison with July 2012.
❖ The
average monthly rent in London fell 4% in October to £1,283 according to the Homelet Rental Index, although on an annual basis rental values were up 2.6%. The average monthly rent across the UK dropped 4.6% in October to £815 per month, meaning it is 91% more expensive to rent in the capital.
❖ Mortgage
lending data from the Council of Mortgage Lenders highlights the continuous growth of first time buyers in London, as 13,100 loans were advanced in Q3 last year representing a 32% uplift on the same period in 2012.
❖ In
the third quarter of last year 10,900 loans were advanced to home movers in London which was an increase of 28% compared to Q2 2013, as well as a 6% improvement on the same period in 2012.
2.9% KENSINGTON
7.8% CHELSEA
5.9%
MAYFAIR
KNIGHTSBRIDGE
3.9%
DIFFERENCE IN SALES PRICES FOR PRIME CENTRAL LONDON OFFICES: END 2012 VS END 2013. Source: Chesterton Humberts Residential Sales Index. Zoopla.
SALES • The most recent figures from our prime sales index show that while prices across Prime Central London continue to climb, the rate of growth throughout 2013 slowed in comparison with the rest of London. Across Chelsea, Kensington, Knightsbridge and Mayfair house prices moved up on average by 5.1% since the end of 2012, with the average price now £2,790,812. • House prices in Kensington experienced the most notable uplift with a rise of 7.8% recorded since the end of 2012, with the average house price now £2,240,455. Knightsbridge remains the most expensive location within Prime Central London as prices increased 5.9% through 2013 to a new high of £3,805,625. • In Chelsea and Mayfair house price growth slowed in 2013, however Chelsea saw an uplift of 3.9%. In Mayfair house prices picked up just 2.9% in 2013, only just above inflation, but at £3,144,667 prices in W1K and W1J are still among the highest in the capital. • Despite the fact house price growth slowed down last year buyer activity remains high as prime London property remains such a valuable and safe asset for wealthy domestic and foreign purchasers. In particular our Chelsea office enjoyed a bumper year as viewings and exchanges increased a huge 93% and 200% respectively, while appraisals and instructions were both up by over a third against 2012. • Positive trends have also been observed in Kensington and Knightsbridge as both offices reported a 27% jump in exchanges in comparison with 2012. This is despite the fact viewings increased by just 3% in Kensington and 5% in Knightsbridge, but as stock levels have been more constrained buyers have been more decisive.
LETTINGS • While the Prime Central London sales market has enjoyed an exceptional few years the lettings market has endured a more taxing time. Our Prime Central London offices experienced mixed performance in 2013, in particular in Chelsea as weekly rental values have receded 7.6% since the end of 2012. At £1,222p/w Chelsea is currently the area in Prime Central London with the lowest average weekly value.
• In conjunction with the sales market the lettings market in Kensington has enjoyed the most success in the Prime Central London market, as average weekly rental values moved up 2.6% in 2013 to £1,323, edging ahead of neighbouring Chelsea. • Average weekly rental values in Mayfair endured a volatile year with a 6.3% fall in the first quarter of the year corrected by an 8% uplift in the third quarter of last year. In the end weekly values moved up 2.1% from the end of 2012 to £1,782p/w. • A similar pattern took place in Knightsbridge as weekly rental values moved up 5% in the first quarter of the year before falling 4.7% in Q2. Over the course of 2013 weekly rental values in Knightsbridge increased 1.1% to £1,782p/w. • As weekly rental values receded in Chelsea in 2013 activity among tenants increased as viewings were up 29% against 2012 resulting in a 7% improvement in the number of agreed lettings. In Kensington the number of agreed lettings matched the figure recorded in 2012 but activity increased noticeably with new applicants rising 8% and total viewings were up by over a third from 2012. • Knightsbridge also saw viewing numbers improve, up 9% on 2012, along with a 6% gain in the number of agreed lettings. Although viewings in Mayfair only nudged up 2.4% in 2013 new applicants jumped up by 51% resulting in a 16% increase in agreed lettings.
Rents in London are
greater than the average for the rest of the country
FOR SALE
Royal Avenue, Chelsea SW3 £5,850,000
FOR SALE
Zetland House, Kensington W8 £2,600,000 FOR SALE
Egerton Gardens, Knightsbridge SW3 £10,000,000
SOLD
Burnaby Street, Chelsea SW10 £2,500,000
FOR SALE
College Place, Chelsea SW10 £2,950,000
FOR SALE
Hays Mews, Mayfair W1J £2,999,995 FOR SALE
Parkside, Knightsbridge SW1X £9,750,000
SOLD
Campden Hill Court, Kensington W8 £3,200,000
FOR SALE
Onlsow Mews East, South Kensington SW7 £4,650,000
FOR SALE
Oakwood Court, Kensington W14 £3,250,000 FOR SALE
Park Street, Mayfair W1K £8,000,000
SOLD
South Eaton Place, Belgravia SW1W £10,250,000
TO LET
Paultons Square, Chelsea £2,600 per week
TO LET
Cadogan Square, Knightsbridge SW1X £3,950 per week TO LET
Cheniston Studios, Kensington W8 £2,950 per week
LET
Manresa Road, Chelsea SW3 £3,500 per week
TO LET
Carlyle Court, Chelsea SW10 £2,000 per week
TO LET
Sloane Street, Knightsbridge SW1X £1,250 per week TO LET
Abingdon Villas, Kensington W8 £1,750 per week
LET
Eaton Place, Belgravia SW1X £2,950 per week
TO LET
Onlsow Gardens, Chelsea SW7 £1,875 per week
TO LET
Eaton Square, Belgravia SW1W £1,150 per week TO LET
Hornton Street, Kensington W8 £995 per week
LET
Park Street, Mayfair W1K
£3,650 per week
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