So far this year the volume of Mayfair sales are down by over a third this year compared to 2013 – the lowest amount of actual sales since the “Lehman Crash” era of 2008 and 2009.
Wetherell 75% market share
Ten years ago the turnover of 86 properties sold in 2004 increased by about a half to 118 properties sold in 2007 with volume crashing by over 50% in 2008 to 52 properties sold. So far this year only 58 properties have sold on the open market with Wetherell having a commanding 75% market share of all properties sold over £10 million. (Source: Lonres)
The 3 “Ds”
The old estate agent’s adage for the driving forces for property coming to market is “The 3 Ds” – debt, death and divorce. People also trade up or are trading down, moving in or moving out of the area.
Income verses Capital Value
For buyers who cannot find a suitable property or afford it – the rental market is an option whilst waiting for the perfect property for sale. There is always a relationship between capital value and rental income.
Rental Income verses Hotel RAK rates
Mayfair however with its 3,800 five star hotel rooms has a further economic relationship and value dynamic between the cost of a longer term hotel stay compared with a 6 month or yearly rent of a property in the Mayfair area.
Mayfair has 350 years of community in 285 acres accommodating 4,363 addresses. It might surprise you to know that 73% of its 5,200 permanent residents have no other residential address apart from Mayfair.
The market is therefore always constrained by lack of stock and what we have seen recently is the emergence of the super luxury rental sector more akin to hotel rates that normal rental income.
HIGHLIGHTS OF REPORT:
COST OF RENTING A ROOM IN LONDON HITS RECORD HIGH ACROSS THE HOTEL, SERVICED APARTMENT AND FLAT-RENTAL MARKETS
• The hotel suite and rented apartment markets are becoming increasingly similar
• Branded residences that provide hotel suites, serviced apartments and private sale flats are set to grow and become a major niche sector of the London property/hospitality market
• Rising property values in PCL (up 77.9% since 2009) are making budget hotels unviable making more 5 star hotels the only viable pipeline option
• The cost of renting a room and sleeping overnight or longer in Prime Central London (PLC) has hit new record highs across the hotel, serviced apartment and flat-rental markets
• At £2,050 per night, the cost of renting a 5 star London hotel suite is now eight times more expensive than renting a furnished apartment (£248 per night)
• At £11,700 per night for its top suite – Mayfair is London’s most expensive hotel destination
Rented apartment rates have risen by over 25% since 2009 creating the opportunity for investors to acquire a London apartment in need of refurbishment, create an ‘Armani style’ residence, rent out and effectively “enter the luxury hotel business” (Source: Lonres in association with Dataloft)
These are some of the findings of the new ‘Sleeping in London’ report on the hotel, serviced apartment and private flat-rental markets undertaken by leading West End and Mayfair estate agent Wetherell. Click here for link to Wetherell Website to download report.
STOP PRESS Here are our latest Wetherell properties to come to the Mayfair market:
Close to The Dorchester – @ £3,950pw – A 5 bedroom newly renovated house with private terrace and home theatre
Three Kings Yard – @ £,2250pw – A newly renovated 2 bedroom house in a secure gated mews with car parking
Park Street – @ £1,750pw – A 3 bedroom penthouse apartment with massive private roof terrace and direct lift access
St James Square @ £1,350pw – A 2 bedroom luxury flat overlooking the square with lift and porter
Park Lane @ £895pw – Luxury 1 bedroom flat on Park Lane with lift and 24hr porter
Mayfair in August is a very special time – you can probably book into any of your favourite restaurants, enjoy shopping in your special haunts and park wherever you wish whilst the rest are away on holiday! Enjoy.