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May 2010

“There were 3 in the bed
and the little one said
roll over, roll over”

 

I had delayed the Wetherell Report on the Mayfair residential market to enable me to comment on the results of the General Election in the UK; I certainly did not think it would have been delayed for so long after the election or to the outcome.

I have worked through various elections since the early 1970’s but have certainly NEVER experienced anything like the last few months where the prime residential market for central London has totally ignored the political circus and embarked on a buying spree with no thought to the implications of the agendas for any of the political parties.

EXCHANGE ON ELECTION DAY
Indeed we exchanged on a property on General Election Day 6th May and built up a pipeline of offers on nearly £100 million on Mayfair property.  We now wait to see which of these bids were “markers” pending the outcome of the election and how many will now go through to successful sales.

BACK TO SPRING 2008 VALUES
The market is now edging back to Spring 2008 values; Wetherell exchanged in April on a large flat overlooking Grosvenor Square with the main reception rooms and bedrooms overlooking the gardens; on an asking price of £7.75m it represented £3,000 p.s.f.  We now have a further unmodernised apartment with great views over the gardens at a figure close to £3,000 p.s.f.

BUYERS’ HNWI’S FROM ABROAD
The majority of enquiries and sales are now from abroad as the diminished band of High Net Worth Individuals seek a safe world wide haven for their cash into a tangible asset class; where better than Mayfair real estate?  This is especially the case when you can take advantage of the weak sterling exchange rate, giving a perceived discount plus a hedge against future inflation.

OFFICES BACK TO RESIDENTIAL
The confidence in Mayfair residential remains high with commercial buildings being sold at record low yield rates and then reverting back to residential use with development uplift.  Ironically, a sign of an improving market is an increase in bank and receivership sales where financial houses sense the right time to sell is when asset values strengthen.

Mayfair will be one of the most exciting development areas of London over the next 5 years; Land Securities have commenced building work on Park House, Mayfair’s largest mixed use development of nearly half a million square feet and there is a further three quarters of a million square feet planned in the Mayfair area reverting back to residential use.

GOVERNMENT PLEDGES
The Conservative pledge was to scrap Home Information Packs (HIPs) let’s hope they keep to it as presently it delays the “quietly on the market” properties coming to market.  Also next year’s increase of stamp duty from 4% up to 5% should be reviewed as it will stagnate the market and once clever lawyers think up mitigation schemes the result will be the Revenue taking less than they received before – the law of unintended consequences!

STOP PRESS
Grosvenor Square – A 4th floor apartment with outstanding views over the square gardens. 2,049 sq.ft. @ £2.95M

Davies Street – Last 20 year lease in Grosvenor development.  1,205 sq.ft. @ £650,000

Balfour Place – Ist. floor two bedroom apartment with stunning “oval” reception room. 1,234 sq.ft. @ £1,300 p.w.

South Street – 5 bedroom period house plus garage @ £5,000 p.w.

Park Lane – One let, one available. Magnificent duplex penthouse with four bedroom suites, awesome reception rooms and roof terraces. Garaging 2 cars.  £25K p.w.

PARW
12/5/10

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