Whilst walking through Mayfair, our client commented, “anyone would think that gold had been discovered under the streets of Mayfair there is so much digging.” The construction work is continuing, glossy shiny buildings are soaring up to the sky, Mayfair townhouses are glowing with their expensive facelifts, but the gold has disappeared.
The Mayfair and St James market has ‘cooled significantly, falling by 25.4% in the second quarter of 2017’ according to Coutts. The LCP report, from the knowledgeable Naomi Heaton, tracks residential property sales, they show that new build sales fell by 13.6% and quarterly transactions fell by 56%. If you thought that by developing a piece of prime real estate was going to bring you a yacht in the South of France, you have to think again, it is more likely to bring you a visit from the debt collectors as your profits fall. Why has this happened when we have all be told time and time again by the pin-striped super estate agents, that Mayfair and St James property prices are resilient?
You have to look back in order to go forward. Four years ago, you could not pick up the Evening Standard without reading articles about the fabulous prices being achieved in Mayfair, there was a highly entertaining programme with a leading estate agent showing off Mayfair. Developers took advantage of planning changes enabling properties to revert back to residential. Sadly, there are other readers of the Evening Standard who did not like this hype and the fact that over half the population in the nearby Royal Borough of Kensington & Chelsea were non-domiciled in the UK. The Chancellor stepped in and introduced some major tax changes; we voted for Brexit and international buyers started looking East for value, Mayfair and St James were no longer the flavour of the month. The media changed their tune, no longer wanting to visit the palaces to bling, which had been created by focusing on homes for people outside this gilded area. There are horror stories of how long some of the properties have been on the market.
Developers with deep pockets, who can ride out the storm, will survive. The market will return at a more sustainable level, but will the buyers, who have now discovered Marylebone, Shoreditch and Battersea, with more space for your bucks and vibrant street scenes? Will prices return or will Mayfair and St James revert back to the quiet, refined and quite boring luxury, full of groups making their way through to Buckingham Palace.
What is forgotten is the army of small craftmen and women, businesses which have been built on creating these uber rich piles. Craft Week in London in May had 230 events and treble the number of visitors interested in the incredible talent, passion and imagination from specialist craft masters in London. Along with the interior designers, the specialist contractors, the artisans, the fabric designer who has created bespoke designs, all of them have built their businesses on prime and super prime have been given air to breath to develop and create, and for this reason alone we should be grateful for all the digging in Mayfair and St James.
Banner Image of the Royal Academy of Arts and Image of Mount Street courtesy London Central Portfolio; Oldbury Place Image courtesy Boultbee Ldn; Transatlantic chair-infinity star embroidery by Geraldine Larkin courtesy Geraldine Larkin.