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Spotlight Marylebone and Fitzrovia Autumn 2015

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Spotlight Marylebone and Fitzrovia Autumn 2015 Savills World Research UK Residential Spotlight Marylebone and Fitzrovia Autumn 2015 savills.co.uk/research 03 Spotlight | Marylebone and Fitzrovia Market overview as slightly disreputable, despite AN ONGOING EVOLUTION being surrounded by more wealthy districts. Marylebone and Fitzrovia continue to grow as However, the perception of Fitzrovia is changing as illustrated demand increases for these central locations by the new restaurants on Charlotte Street. The makeover ocated in the centre De Walden Estate. Howard de began with demolition of the old of London, both Walden are credited with turning Middlesex Hospital and Fitzroy Marylebone and Fitzrovia the run-down high street into a Place, a high-end residential L have undergone significant sought after retail destination development, being built in its transformation over the past 10 by managing a mix of boutiques place. This helped change the years, led by a combination of and small retailers. The Portman feel of the area but Fitzrovia still estate regeneration and new Estate similarly created a offers good value as the price luxury developments. As the popular mix of tenants on gap with its neighbours remains. evolution continues, the area Chiltern Street, Seymour Place is likely to see a further boost and New Quebec Street. Property prices in demand from the opening of The residential property in Over the past year the Crossrail in 2018 and further Marylebone mirrors much of average sale price in Marylebone high-end development activity. prime central London, consisting was just over £1.5m, in line with of Georgian squares and terraces, the average across the borough Marylebone mews houses and Edwardian and of Westminster, while in Fitzrovia Over the past 10 years, Victorian mansion flats. A large average values were 25% Marylebone has evolved from proportion of the terraces have cheaper at £1.1m. Both locations the less fashionable neighbour been converted into flats with just offer a significant discount to of exclusive Mayfair to one of 12% of properties in Marylebone neighbouring Mayfair where the London’s most popular districts. remaining as houses. average sale price was £3.3m A large part of the Marylebone and houses, although few in success story is its improved Fitzrovia number, are selling for an average retail and leisure offering. This To the east of Portman Place, of nearly £10m. has been created, for the most the district of Fitzrovia consists Marylebone in particular part, by the two landlords that of smaller, irregular streets with has seen strong growth over own the majority of the area, fewer grand squares. The area the past few years. Across all The Portman Estate and Howard has historically had a reputation of prime central London, prices have increased by an average of 2.9% over the two years to June 2015. Over the same period, prime property in Marylebone has increased by 13.9%, the highest of any central London district. The rental market Rental values across both districts are of a similar scale to the sale prices. In Marylebone, the average monthly rent is £2,920 compared to £2,270 in Fitzrovia, a discount of 22% according to Rightmove. However, the rents vary significantly depending on months. In the prime markets of purchasers and a few Americans. property type and size. In Marylebone and Fitzrovia, 52% of However, 2015 has seen a shift Marylebone, the average rent buyers were international, ranging towards British buyers who have varies from around £2,000 per from Europeans, Middle Eastern accounted for 63% of purchasers month for a 1 bed property to over £10,000 per month for a 4+ bed property. Demand The demand for prime property in the area comes from a number of sources. International residents are an important source of demand for the prime housing market across London, accounting for around 38% of buyers over the past 18 FIGURE 1 The housing market around Marylebone and Fitzrovia over the past two years* A look at where the sales happened and at what average value for each specific postcode Average Sale Price n Over £3m n £2m to £3m n £1m to £2m n Under £1m Marylebone Fitzrovia (W1H, W1U & W1G) (W1W & WIT) Source: Land Registry *24 months to April 2015 Autumn 2015 so far this year. Industry also households in Marylebone and of international companies plays an essential part, reflecting Fitzrovia respectively are in the in London. the good transport links to a private rented sector, significantly Savills figures show that number of key employment hubs, higher than the average across nearly half of all prime tenants particularly the West End. London of 25.1%. in Marylebone and Fitzrovia The largest employment There is a wide range of are renting due to employment industry for people living in tenants, including families, relocation and just 27% Marylebone and Fitzvoria is the couples and many students. In are British, with the highest Financial and Insurance sector the prime rental market, demand proportion of tenants originating followed by the Professional, is driven by a strong employment from Western Europe, accounting Scientific and Tech sector market and an increasing number for 37%. n accounting for 20.9% and 18.4% of the employees respectively, FIGURE 2 according to the 2011 Census. These are both high value What would the same property sell/rent for on industries but over the next our featured roads? five years Oxford Economics PERIOD CONVERSION-FIRST FLOOR FLAT forecasts that while the Financial 2 BED 2 BATHS, 1,000 SQUARE FEET and Insurance industry will experience minimal growth, Location Postcode Sale value Rental Value* employees in the Professional, Scientific and Tech industry will Marylebone High Street W1U £1.895m £1,100 - £1,200 increase by 15.6% to become the largest employment industry in Mansfield Street W1G £2.25m £1,200 - £1,295 central London. Montagu Square W1H £2.35m £1,300 - £1,395 Marylebone and Fitzrovia already account for a higher Nottingham Place W1U £1.895m £1,100 - £1,200 proportion of employees in this sector than the Westminster Berners Street W1T £1.7m £1,050 - £1,095 average and so are well placed to draw on the newly created wealth Source: Savills Research *Per week that will result, as Tech buyers in particular, look for alternative locations to live in. “The demand for prime property in the Investors area comes from a number of sources” Investment buyers are particularly Sophie Chick, Savills Research attracted to the area due to the large number of tenants living there. According to the 2011 Census, 56.7% and 46.1% of Rental demand is driven by a strong employment market Spotlight | Marylebone and Fitzrovia Development SUCCESS ENCOURAGES DEVELOPERS ver the past few In Marylebone, the Park. In addition, The Mansion on years, both Marylebone developments in the pipeline are Marylebone Lane close to Oxford and Fitzrovia have seen smaller. There are three notable Street will be completed in 2017. O an increasing number of prime residential schemes in close The success of the current residential developments and proximity, two are opposite schemes and the prices being this is set to continue. each other on Paddington achieved has encouraged While the majority of these Street: Chiltern Place and The more developers to the area as developments are under 100 Chilterns and, just to the south, Marylebone is firmly established private units or much smaller, there is a planning application as a super prime location and there have been a few game to redevelop Moxon Street Car Fitzrovia moves up the rankings. n changing larger schemes. The largest development in the area for some time was Fitzroy Place, which is due to complete later this year and has helped to put Fitzrovia on the map as a prime residential location. Also located in Fitzrovia is Rathbone Square, which is scheduled to complete in 2017 and is the second biggest development currently under construction. FITZROVIA: FITZROY PLACE FIGURE 3 Key developments in Marylebone and Fitzrovia with over 20 private units, which we expect to deliver over the next five years Site name Private Units Principal Player Development Status Fitzroy Place 235 Exemplar Properties Under construction Fitzrovia Rathbone Square 142 Great Portland Estates Under construction Chiltern Place 56 Ronson Capital Partners Under construction Marylebone Square 54 The Ridgeford Group Full planning permission Marble Arch Tower 49 Almacantar Full planning permission The Chilterns 44 Galliard Homes Under construction Marylebone Elliott House 31 Residential Land Full planning permission Harcourt House 25 Harcourt Investments In planning The W1 24 Royalton Full planning permission Marylebone Police Station 24 The Portman Estate Full planning permission The Mansion 21 Clivedale Properties Under construction Source: Savills Research Autumn 2015 The rental market Across prime London, we Outlook expect the strengthening THE SALES MARKET London economy and continued expansion of sectors he outlook for strongly. This has led to a slight such as technology and Marylebone and Fitzrovia outperformance in growth so telecommunications to underpin needs to be considered far this year, but the Mortgage demand for prime rental T in the context of the wider prime Market Review continues to property over the medium term. London market. restrict the amount people can In Marylebone and Fitzrovia, In the run up to the General borrow and therefore limit house the number of private renters Election the prime housing price growth. is already high and the area market stalled, following the Across all prime London, is very well placed to attract changes in Stamp Duty and the we expect the combination more investment from both threat of a mansion tax. Since of the higher taxes, increased traditional and institutional May, some of the deferred mortgage regulation and the investors.
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