1st Half of 2009
“In the last 2 years,
75% of all Mount Street residential sale transactions
have been through Wetherell”
Slow Start to 09 but confidence rising
After a very quiet first quarter and a second quarter that took a long time to warm up, the general consensus is that the overall property market over the last two months has picked up both in value and volume of sales.
Volumes low, value not the prime issue
For Mayfair it is still a low volume issue that is holding back the market and not values. Indeed for the prime property that is selling, the indications are that the drop in values has only been in the region of 15% and not the 25% of the top that have been widely reported.
Property enquiries and viewing levels for May and June have risen incredibly compared to Q1 2009 with the pipeline of property under offer looking healthier at 15% of available stock and over a third of property available is sporting a price reduction.
The volume of deals is still half of this time last year which itself was 50% down on 2007. Correspondingly the number of estate agents transacting the deals has fallen from 30 in 2007 to 20 in 2008 and now in 2009 it has halved again to only 10. The upbeat spin however is that the top three agents represent 60% of the market share with Wetherell being the market leaders.
The average sales discount for 2009 has been 7% off the asking prices and we have seen from the buyers a market confidence moving up through the price bands particularly in the £10M+ range although as yet we have not broken though the £20M barrier!
Success of 20 year leases
We have recently been instructed by Grosvenor to offer new 20 year leases on a development of 2/3 bedroom apartments in Davies Street, adjacent to Claridges. Prices range between £400-500 p.s.f. with prices from £425,000. These 20 year leases are not enfranchisable but appeal to buyers seeking extra accommodation in the area without the need to sell and trading up or to those who are currently renting and see a 20 year term as a long let with inflation capped.
Mayfair Rental Market up by 50%
The volume of successful lets for the rental market is quite the opposite from sales, with lets for April to June up by 50% but the average weekly rent down by 10%. This is partly due to the over supply of stock available due to the fact that the previous tenant unsuccessfully tried to negotiate a discount for renewal which on being declined went and rented a new property. The only trend we are seeing an influx of Europeans. There is no loyalty from landlords to estate agents with multiple instructions being the norm however it is good to note that there is a polarization at the mid to top end of the market with a small number of agents with Wetherell having 11% of total rental market value.
Mount Street Sales Hit Record Price
Wetherell, the Mount Street market leaders, have sold two apartments in the last month proving that buyers are still willing and able to purchase, for a premium, a Mount Street home. A 3rd floor three bedroom corner apartment of 2,047 sq.ft. was placed on the market with a large number of estate agents at a figure of £4.95M. Wetherell took on the marketing and within 4 weeks it had been sold at a record figure of £2,360 p.s.f.
Also a 2,956 sq ft unmodernised triplex looking south over the Mount Street Gardens came to the market late summer ‘08 at £4.25M. After a price reduction we had 3 buyers competing at a sale figure of £3.5M.
Best Mount Street Deal For Sale
A volumetric 1st and 2nd floor corner maisonette located in a portered apartment block close to Berkeley Square. South and east facing with 3 bedrooms and 2 reception rooms, this 2,163 sq.ft. maisonette is for sale on a long lease at £3.75M.
Outlook for Mayfair
For sales, the stock is still low but there is probably equilibrium with the number of cash buyers in the market. The only difficulty is the number of agents trying to eat off an ever diminishing size of cake especially with the leading agents now cutting a larger portion. Over-valuing by some agents is once again rearing its head on properties priced as prime but in reality secondary – it is no longer a market where you can sell the worst house in the best street for the same price as the last sale achieved. There is still price sensitivity but fast exchanges are back with even the occasional attended exchange! Lack of well priced stock will still be the key issue for the second half of 2009.
For rentals, the asking prices will continue to fall as the £ has increased in value but demand will increase as some buyers hold off with unemployment still rising and interest rates due to increase in 2010.
However for those with a view that inflation will once again be a serious issue in 2-3 years time; this might be the best time in a new long cycle to be buying back into bricks and mortar.
“Wetherell is a force to be reckoned with in London’s prime real estate market”
Spear’s Wealth Management Survey Property Power Index
Peter Wetherell has worked in the area for over 35 years and celebrated 25 years of Wetherell in 2007. Wetherell are Mayfair’s leading estate agents specialising in the sale and rental of houses and flats in London’s No.1 area. Operating out of a prominent corner office located in Mount Street, Mayfair’s up and coming top end fashion High Street.