Mayfair lifestyle moves out of reach
LONDON’S HOUSING market could do a good impression of Mark Twain. “The reports of my death have been greatly exaggerated,” would be its response — if it could talk — to recent headlines promising a property prices slump in the capital. London is now the world’s most expensive city to rent a five-star hotel room, luxury serviced flat or rental apartment according to the findings of a new accommodation survey. The cost of renting a five-star hotel room in London now averages £497 per night, compared to £361 in Geneva, £283 in Los Angeles, £259 in Tokyo and £131 in New York.
Meanwhile, rented apartment rates have risen by more than 25 per cent since 2009 — and in some cases much more. An £80,000 monthly rent was unusual five years ago. Today, a fivebedroom penthouse in Knightsbridge commands a rent of £200,000 per month.
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 Mayfair estate agent Wetherell, which claims this market is undersupplied. There are currently fewer than a dozen branded residences across inner London. The most high-profile include One Hyde Park (Mandarin Oriental), The Shard (Shangri-La), Marconi House (ME Hotels) on The Strand and The Residences at W Hotel (Starwood Hotels) in Leicester Square.
Estate agent Hamptons International says that house prices in Greater London will rise by 15.5 per cent in 2014 and three per cent in 2015. Across the South of England, it expects prices to grow eight per cent this year and 6.5 per cent next year. Compare this to Hamptons’ prediction of prices up 8.5 per cent this year and by 5.5 per cent in 2015.
It says that the pace of growth is beginning to soften, with events such as the election and possible interestrate rises likely to mean weaker price growth throughout 2015.
This activity may have been hard on property buyers but it is good news for developers. Hamptons’ newest subsidiary, Stanmore-based Preston Bennett, reports strong sales at a block of flats in Wealdstone, which it is marketing for local developer W.E. Black.
Launched last month, Ashdown Lodge has already sold nearly 50 per cent of its apartments off-plan. Aimed at commuting professionals, the development is a short walk from Harrow & Wealdstone tube and overground station. Prices at Ashdown Lodge start from £282,500.
Despite the slowdown in price rises, there is still an upward trend. Fionnuala Earley, Hamptons’ director of residential research believes that there will be fewer sales in the next 18 months compared to the past year and a half.
“The pace of increase seen earlier in the recovery is unlikely to continue,” she says. “There are some competing issues. As house-price expectations are moderate, the incentive to buy as quickly diminishes, reducing the pace of growth in demand. However, for those already in the market who have been waiting for a peak in prices, there is now a greater incentive to sell.
“This should lead to an increase in stocks of existing property for sale, which should boost liquidity and the level of activity. That switch has already happened in London, where stock levels are improving as many choose to cash in and move to commutable areas outside the capital.”
Perhaps it was headlines announcing real-estate price crashes in an August in the 1870s that inspired Mark Twain to write in Roughing It: “Unassailable certainty is the thing that gives a newspaper the firmest and most valuable reputation.”