In 2015 we updated our `Who Lives in Mayfair ` report gives an insight into the local population of one of the worlds most prestigious neighbourhoods.
Over 5,100 permanent residents, from more than 42 nationalities live in Mayfair and 60% of residents were born overseas. Within that group, 64% arrived in the UK between the ages of 20 and 44.
There is more space for people than you might think, with a population density of just 39.3 people per hectare, compared to over 100 in the Westminster Borough as a whole. Mayfair also has a thriving business sector, with the population increasing to over 85,000 on a daily basis. Mayfair is becoming younger.
The proportion of residents aged between 25 and 44 has risen from 33% in the 2001 Census to 42% in 2011.
Household sizes have also diminished, with over 55% of private rented households and 52% of owned properties containing just one person in the 2011 Census. Reflecting the high levels of wealth, 12% of all single person owner-occupiers boast properties that have over four bedrooms.
Across Mayfair, 46% of properties are privately rented. This compares to 26% that are privately owned (66% of which are owned outright). Since the 2001 census, the figures for home ownership have remained stable but the number of people privately renting has increased. Such figures are indicative of both Mayfair’s housing stock (over 80% of dwellings are purpose built or converted apartments), rising capital values, and the changing make-up of Mayfair residents.
Mayfair’s central location and the quality of life on offer attracts people who want the best of both worlds. 11% of the working age population of Mayfair work from home, compared to just 7% across the rest of prime central London. 22% commute on foot and 29% enjoy a journey of less than two kilometres to their place of work. These figures are significantly higher than for the rest of prime central London.
Owning a property in this exclusive London neighbourhood remains a challenge. In total, Mayfair has 4,348 residential dwellings, and with only 110 properties sold each year on average, the property market is highly competitive.
- Property values in Mayfair are amongst the highest in the country.
- Over the last 12 months (March 2014-February 2015), the average value was nearly £2,300 per square foot, a rise of 7.4% from 2013.
- Since 2009, the average price per square foot of property has risen by 72% compared to just 65% across the rest of prime central London.
- Over 91% of all properties sold over the last 12 months commanded a value of over £1 million and 28% of all properties sold for over £5 million, a rise from 17% the year earlier.
- Average £ per square foot values recorded in Mayfair, over the last 12 months, were 37% higher than the rest of prime central London.
Rental market outperforms the rest of prime central London
The lettings market has also gone from strength to strength. Over the last 12 months, 475 lets were agreed in Mayfair, an increase of 5.5%
on the previous year. In contrast, the rest of prime central London has witnessed a fall in rental transactions of -3.7% year-on-year.
Apartments dominate Mayfair’s rental property portfolio, accounting for 91% of residences and more than 92% of lets agreed during the last year. So far this year, rents achieved across Mayfair average £1,225 per week, with the area offering a superb standard of size and design. The average size of a two bedroom apartment let in Mayfair is 15.5% larger than across the rest of prime central London, while three bedroom apartments are 29% larger. This equates to an average of 1,891 square foot compared to 1,466 square foot across the rest of prime central London.
Mayfair is also an attractive proposition for investors. Since 2004, property values in Mayfair have outperformed all other asset classes apart from gold, including the rest of prime central London and the FTSE index, meaning that returns have been significant. The average £ per square foot value of property in Mayfair has risen by 196% since 2004, compared with 157% across the rest of prime London and 29% and 36% for CPI and the FTSE 100 respectively.
For buy-to-let investors, gross yields have remained stable; at 3% since the economic downturn. This is in sharp contrast to the rest of prime central London, where yields have been on a downward trajectory.
Since 2009, housing stock across the prime central London boroughs has risen by 8.6%, equating to an additional 5,200 residential addresses. However, while the Royal Borough of Kensington & Chelsea has witnessed a 0.5% increase in stock, the City of Westminster has seen a growth of 14.6%. Mayfair is entering its most prolific period of development since World War II. Over the next five years, residential dwellings across the district will rise by nearly 9%, with an additional 391 residential units currently in the planning pipeline set to create a plethora of new homes acrossthe district.
The planning conundrum
Westminster City Council has long welcomed the conversion of low quality office space to residences, often returning buildings to the use for which they were originally designed. This policy has helped to rebuild a cosmopolitan community in the heart of Mayfair.
However, such has been the scale of the loss (an estimated 1.8 million square foot or 167,000 square metres since 2011), that Westminster now fears for the office market. Therefore, in a recent letter, the deputy leader of the Council announced that from September 1st, ‘housing is no longer acceptable … where it results in a loss of office floorspace’ except in circumstances they describe as ‘rare’. Owners with ambitions to convert need to act fast.
Exciting changes ahead that will affect planning decisions The next five years are set to see a major change in Mayfair. Within the development pipeline in Mayfair there will be a loss of 100,000 square metres of office space and a gain of over 110,000 square metres of residential space. However, planners have stated that an additional 153,000 square metres (1.65 million square feet) of office space is required across the borough to meet the 14% increase in employment that is projected by 2036. Striking a balance is a challenge and there are nuances to consider. Although Mayfair is witnessing an intense period of development, the area is, and will remain, a supply-constrained market.
Mayfair boasts a higher than average proportion of residents who work from home, with 11% compared to 6.9% across prime central London. Also, by 2036 it is projected that the City of Westminster will be home to over 62,000 individuals who are self-employed, the second highest of any borough in London, with only Southwark expected to have more. For many, their property is likely to act as home and office.
Much of Mayfair is owned by landed estates that have had a significant impact on the development of the area. For example, with a significant interest in both commercial and residential property, Grosvenor will add an additional 750,000 square feet of retail, office and residential space across Mayfair over the next decade.
With the impending arrival of Crossrail, providing new access to Bond Street Station via Hanover Square, the make-up of Mayfair will adjust yet again. Since the year 2000, over 150 new retailers have opened premises in the area and more are anticipated before 2018 (when this part of the Crossrail project is due to complete). Daily passengers to Bond Street are anticipated to increase by 42% to 220,000 per day by 2018, while journey times to Heathrow will be reduced to just 34 minutes. This will make the area easily accessible for international visitors.