PRIME CENTRAL LONDON HOUSING STOCK INCREASES BY 5,200 HOMES SINCE 2009 WITH OVER 7,000 MORE IN THE PIPELINE
Figures from Pastor Real Estate reveals that housing stock in Prime Central London has increased by 8.6%, since 2009, totalling 5,200 new residences. In an area thought to be ‘out of space’ Prime Central London has outgrown Inner London boroughs by 4%, as developers took advantage of low land costs following the 2008 market crash.
Prime Central London has been high on the investment agenda since 2008, with both domestic and overseas buyers predicting the recent Indian Summer enjoyed by the UK housing market. In the six years since 2009, 144 development schemes have been completed in Prime Central London, with almost two thirds consisting of 10 units, most comprising studio and one-bedroom apartments.
Fast-forward to 2015 and just when you thought Prime Central London couldn’t get any bigger there are 277 development schemes in the pipeline, which will deliver 7,179 units to the market. This represents twice as many schemes and three times as many units than have been completed since 2009.
Responding to growing demands from overseas buyers coming into the market and domestic buyers increasingly choosing inner city family homes over vast country spreads, developers are shifting from small single-occupancy units to larger homes suitable for families. For example, there is at least one three-bedroom unit within 71% of the developments currently in the pipeline.
There is also a marked increase in unit sizes, with an increase of 40% in units in application compared to those currently under construction. Pastor Real Estate has found that the average unit size for schemes under construction in Prime Central London is 543 sq. ft. compared to 763 sq. ft. of units currently at application stage.
The Pastor Real Estate report has also identified Marylebone as the rising star of Prime Central London, with the area currently undergoing a rapid transformation. The report identifies that of 13 development schemes set to complete in 2015, 11 are in Marylebone. The area famous for high-profile restaurants and the well-known fictional English detective will provide almost 50% of schemes in the pipeline, equating to 644 new residences.
Susan Cohen, Head of Sales and Lettings at Pastor Real Estate comments: “Pastor Real Estate operates within Prime Central London and a key Unique Selling Point of our business is our deep local knowledge of the markets and our multi-layered real estate offering.
“Using these statistics we have found that not only are new homes getting bigger in Prime Central London, but everything that comes with them is getting grander. As wealth continues to pour into the capital, ultra-prime living standards increase. New buyers not only want larger homes providing more space for larger families, they also want all of the luxury amenities; concierge services, porters, 5-star hotel quality spas and gyms, IMAX cinema rooms and private dining rooms to entertain guests at will.
“It’s noticeable that the websites promoting high-profile schemes such as Clarges, 20 Grosvenor Square and The Chilterns are now primarily promoting size, space and a full arsenal of luxury amenities. London is moving away from single units and in years to come we will see more and more fabulously luxurious large lateral homes appearing on the market.
Key Observations of the report
In order to produce the new report Pastor Real Estate commissioned market intelligence group Dataloft to review data from LonRes and Pastor’s own records, allowing an in-depth analysis of the evolution of the Prime Central London property market.
Pastor Real Estate report contradicts the myths
The two most popular and enduring urban myths are that: 1) everyone is leaving the heart of the city in pursuit of a ‘rural idyll’ in the countryside, to raise a family in the ‘perfect’ environment and: 2) anyone buying in Prime Central London is only likely to be acquiring a diminutive and seldom-occupied pied-à terre for themselves when operating in business activities within the city or for members of their family to use when visiting or studying in the capital.
However, the facts speak rather differently, which the report identifies as a number of trends that entirely contradict the concept of a mass retreat from Prime Central London to the country, leaving behind only an impermanent inner city population of those staying in seldom-occupied small flats.
The urban population for England and Wales is estimated to have grown by 9% between 2001 and 2011, compared to only 2.5% growth in the rural population. The urban population currently stands at 82% as a percentage of the total UK population, with London representing 13% of the total UK population.
The popularity of the capital is the appetite for change, through considered regeneration of larger homes, central business districts and recreation spaces that are providing the ‘urban idyll’, a perfect environment in which to live.
Ultra prime and super prime residences on the up
Increasingly, the report points out, ‘ultra-prime’ and ‘super-prime’ new-build residential properties are being constructed in Prime Central London. These are not all small units, they’re in fact larger, spacious, multi-roomed, multi-occupancy apartments designed not just for individuals but for couples and families. These are people who want to move into the heart of London to enjoy an urban paradise, with everything in place to offer the perfect family life. Increasingly buyers want to enjoy all that the capital has to offer, whilst also occupying a property that is built round the space and amenity needs of the whole family.
As space becomes smaller development schemes are becoming tighter, but the units within them are increasing in size, the report highlights that there is at least one three-bedroom unit within 71% of the developments currently within the application stage.
Telling statistics tell the story
As proof of this welcome trend the report considers statistics that will enrich the life and liveliness of central London as it gradually evolves. One key statistic highlights that since 2009, housing stock across Prime Central London boroughs has risen by nearly 9%, representing over 5,000 new residential addresses, compared to just 4% across Inner London as a whole.
The biggest difference is between Kensington & Chelsea, which has witnessed only a 0.5% increase in housing stock, compared to the City of Westminster, which has experienced a 14.6% increase. In the same six-year period, since 2009, 144 development schemes have completed across Prime Central London.
Currently in the pipeline nearly 300 schemes are set to complete, which is twice as many schemes, and three times as many units as have been completed or set to complete between 2009-2015.
Properties are getting bigger
Not only are more Prime Central London properties being built, they’re getting bigger too. Across Mayfair, Knightsbridge, Marylebone and Belgravia, all schemes at application stage include at least one two-bedroom unit, and 71% have at least one three-bedroom unit. Unsurprisingly, the size of apartments is growing too, with the average size of studio apartments at application stage 763 sq. ft., compared to 543 sq. ft. for those under construction.
Naturally, there are some star stories in this story of the growth of Prime Central London, with some dream properties becoming omnipresent in London’s history. For example, since the development of the incredibly opulent One Hyde Park, one buyer purchased two apartments and then created a single apartment of over 25,000 sq. ft., highlighting a growing need from certain buyers for a large quantity of space and opulence in their new homes.
In Mayfair, Marylebone, Belgravia and Knightsbridge, more schemes were completed in 2014 than in the previous five years. In 2015, 13 schemes are due to complete, bringing 213 units to market. 55% of these units are within two schemes; Phase 1 of Chelsea Barracks, Belgravia, and The Chilterns, Marylebone; the other 11 schemes set for completion are also in Marylebone.
A secure investment in a stable city
The market is adapting to the growing demands of international buyers coming into London who are used to vast homes that can comfortably fit a sizeable growing family, however, it is also reacting to a shift in favour from domestic buyers who are now seeing central London as a suitable place to raise the family, with many shunning the countryside in favour of city life.
Both domestic and international buyers acquiring large ‘ultra-prime’ and ‘super-prime’ new-build residential properties in Prime Central London are seeking a sound investment in a city and nation perceived globally as one of the most economically and socially stable.
Increasingly, these purchasers are seeking out large residential properties that not only fulfil the social and economic aspirations, but also promise a stable, secure family home and community life in the heart of a city that, with its long and complex history, can still claim to be a series of villages within a growing urban metropolis.
London communities tempt buyers
Popular London streets such as Marylebone High Street, Chiltern Street and Mount Street, like many other Prime Central London streets, are bespoke communities of local people who support independent local shops. These shops are not simply boutiques, restaurants and galleries, but hardware shops, grocers, butchers, shoe-repairers, as well as local cafés, pubs and neighbourhood restaurants, the institutions of an ‘urban idyll’.
These factors give key areas of Prime Central London enormous appeal to wealthy purchasers who want a large, luxurious property, with sufficient space to house their spouses, partners or families, but also want to enjoy a friendly, welcoming and lively neighbourhood, with the atmosphere and presence of a local village.
Residential growth should continue
The report indicates that the trend for Prime Central London residential growth will continue, with a ripple effect outwards to less central boroughs. The Greater London Authority (GLA) is investing £3 billion in London’s housing up to 2015, as well as releasing publicly owned land to build more homes and create new neighbourhoods, within central London. The London Riverside Opportunity Area Planning Framework should provide 26,500 new homes, of which a proportion will be of a significant size in order to attract high-end investors.
Areas such as, Nine Elms, Battersea and Elephant and Castle are all re-inventing themselves as attractive, modern and secure residential areas, to appeal to buyers that typically favour Prime Central London. As London continues to evolve the concept of the inner city ‘urban idyll’ will continue to grow, with London as a flagship exemplar for other cities in the UK, and overseas, seeking global status, to follow.
Key comments on the report
Susan Cohen, added: “We commissioned this report to demonstrate our knowledge of the Prime Central London market and it’s steady evolution through time. With a long history of construction and development, dating back to the 1920s in Monaco, we have a profound understanding of the need to see the changes in the market before they happen.
“This report is a good example of the depth of knowledge Pastor Real Estate holds, not just in Prime Central London, but the London property market as a whole, making us uniquely well placed to advise on real estate in one of the great ‘global cities’.”
For further information on Pastor Real Estate contact Tel: +44 (0)20 3195 9595 or visit: www.pastor-realestate.com