RESIDENTIAL RESEARCH RICHMOND 2014 LONDON MARKET FOCUS ECONOMIC PARALLELS WITH THE SOUTH-WEST PRICE PREMIUM FOR PRIME CENTRAL LONDON LONDON RIPPLE EFFECT PARK AND BEST VISTAS KEY FINDINGS IN FULL FLOURISH The parallels between Richmond and affluent central Richmond prices rose 10.9% in the year to June 2014 versus London neighbourhoods date back hundreds of years. 8.1% in prime central London Changes in London’s prime residential market since the financial crisis have only strengthened the relationship. A third of sales at Knight Frank’s Richmond office in the six The plaques are located on buildings months to mid-June 2014 were Corridor of affluence lived in by noteworthy figures, which in for above £1,000 per square foot Richmond Park is almost as large Richmond include the playwright Noel compared to less than 10% in the as London’s seven other Royal Coward, the artist Turner and the architect preceding six months Parks combined. Sir Christopher Wren. The 955-hectare conservation area Wren’s most famous creation, St Paul’s Richmond accounted for half in south-west London, on which deer Cathedral, can be seen from Richmond of Knight Frank sales above have grazed for more than 375 years, Park, a view that is London’s longest £10 million in prime outer London represents 49% of the park space in the so-called ‘protected vista’ under local in the year to mid-June 2014 capital owned by The Crown, including planning rules. Furthermore, the view from Hyde Park and Regent’s Park. Richmond Hill across the River Thames is the only vista in the country protected by The average sale price within Richmond’s expansive greenery and an Act of Parliament. 50 metres of Richmond Park’s picturesque river views are the most northern edge was £4.05 million obvious reasons property buyers target In addition to its history and architecture, between January 2011 and March the affluent town of about 22,000 people Richmond has strong socio-economic 2014 versus £1.35 million 50-300 eight miles from the centre of London. parallels with affluent central London areas. metres away But there is sound logic beneath its As figure 5 shows, a series of indicators leafy charms and Richmond has close covering household income, education and Rental values spike near historic, social and economic parallels employment demonstrate how a corridor of Richmond Park and for with central London that drive demand affluence runs through south-west London properties with the best views for prime residential property. from Westminster, through Kensington & Chelsea and Fulham and into Richmond. on Richmond Hill First, its royal history means Richmond’s history and geography mean it Richmond’s housing stock shares combines the verdant English countryside the same grand architecture as many with the grandeur and affluence of prime traditional central London areas like central London. Belgravia and Knightsbridge. The area’s status as a royal residence dates back more than 700 years and was FIGURE 1 cemented at the start of the 16th century Richmond prices outperform prime when King Henry VII built Richmond central London (PCL) and UK Palace. He named it after his ancestral home in Yorkshire and the town that 120 RICHMOND developed around the palace took the PCL UK MAINSTREAM same name. The deer arrived in 1625, 115 when Charles I moved his court there to escape the plague in central London. 110 The result is a predominance of stately Georgian-era architecture for which 105 TOM BILL there is strong demand among buyers. Head of London Residential Research A series of prominent inhabitants 100 underline the area’s notable history. “ Richmond’s history and Richmond has the fifth highest number geography mean it combines 95 of blue plaques of London’s 33 J F M A M J J A S O N D J F M A M the verdant English countryside boroughs, a list headed by the central 2013 2014 with the grandeur and affluence districts of Westminster, Camden and Source: Knight Frank Residential Research / of prime central London.” Kensington & Chelsea. Nationwide 2 FIGURE 2 The park premium AVERAGE PRICE BANDS North Sheen East Sheen £350,000-£750,000 £750,001-£850,000 Roehamption Club RICHMOND East Sheen £850,001-£1,000,000 Common £1,000,001-£1,250,000 £1,250,001-£1,500,000 Roehampton £1,500,001-£1,750,000 £1,750,001-£2,000,000 Petersham Richmond Park Golf Course £2,000,001-£3,536,708 RICHMOND PARK AVERAGE PRICE BANDS North Sheen East Sheen £350,000-£750,000 £750,001-£850,000 Roehamption Club RICHMOND East Sheen £850,001-£1,000,000 Isabella Common Plantation Kingston Vale £1,000,001-£1,250,000 £1,250,001-£1,500,000 Roehampton £1,500,001-£1,750,000 £1,750,001-£2,000,000 Petersham Richmond Park Golf Course £2,000,001-£3,536,708 RICHMOND PARK Source: Knight Frank Residential Research / Land Registry Isabella outlook improved.Plantation It marked the return Demand has grown as buyers from The sales market Kingston Vale of the so-called ripple effect in house areas including Notting Hill, Chelsea and Richmond has benefitted from a price growth, where increases emanate Kensington look further south and west fundamental change in the prime outwards from central London, as has for more space, something Richmond London property market since the global happened in previous property cycles. has in more abundance than most parts financial crisis. of London. As a result, Richmond prices rose 10.9% Prices in prime central London grew 53% in the year to June 2014 compared to Proof of this growing interest is that the between their post-Lehman Brothers low- 1.5% over the preceding 12 months. number of new applicants registering at point in March 2009 and the end of 2012 Knight Frank’s Richmond office was 32% This growth was higher than the increase as turmoil in global financial markets higher in the six months to May 2014 than of 8.1% in prime central London and, as drove international money to London the preceding six-month period. figure 1 shows, Richmond prices have seeking a safe investment. outperformed prime central London and The trend for buyers in London seeking The wave of capital was largely confined the UK mainstream markets since the more square feet for their money is to the boroughs of Westminster and start of 2013. particularly notable in higher price brackets Kensington & Chelsea and Richmond due to strong growth in traditional markets Richmond has also benefitted from rising prices grew 18% over the same period. like Knightsbridge and Belgravia. numbers of buyers seeking the sort That changed at the start of 2013 when of 3,000 square foot-plus homes with Buyers are increasingly prepared to look double-digit growth spread to prime outdoor space have become increasingly further afield for high-value property and outer London as the UK economic difficult to find in central London. in prime central London, 26% of £10 3 RICHMOND 2014 RESIDENTIAL RESEARCH FIGURE 3 Residential development pipeline in the borough of Richmond INLAND REVENUE Osterley Status: Application or appeal Private units: 141 Developer: Taylor Wimpey RUGBY FOOTBALL UNION GROUND Status: Full permission Private units: 82 INTERNATIONAL MAIL EXPRESS Developer: Rugby Football Union Status: Full permission Hounslow Private units: 49 Developer: Harepath Properties East Sheen Isleworth RICHMOND POLICE STATION Status: Application or appeal Private units: 20 RICHMOND Developer: Sunley ROYAL STAR AND GARTER ROYAL MAIL SORTING DEPOT Status: Full permission Status: Full permission Private units: 86 Private units: 99 Developer: London Square Developer: St James Petersham Twickenham TWICKENHAM RAILWAY STATION Status: Full permission Richmond Park SOMERSET HOUSE Private units: 137 Developer: Kier Group Status: Full permission Private units: 30 Developer: Linden Homes TEDDINGTON STUDIOS Status: Application or appeal Private units: 207 Developer: Haymarket Media Group LATCHMERE HOUSE Teddington Status: Application or appeal Private units: 24 Developer: Berkeley Homes FORMER NORMANSFIELD HOSPITAL SANDY LANE Status: Full permission Status: Complete Private units: 89 Private units: 123 Developer: Eramo Developments Developer: Linden Homes Source: Knight Frank Residential Research / Molior / EGi million-plus deals have been done in FIGURE 4 the so-called “golden postcodes” of The Richmond Hill premium Mayfair, Knightsbridge and Belgravia in 2014 compared to 51% last year. £3,500 BEST VIEWS FROM 100 TRAIN STATION RICHMOND HILL Given its parallels with prime central RICHMOND PARK RENTS PCM 90 London, Richmond is well-placed to ENTRANCE ELEVATION (METRES) benefit as demand for so-called super- £3,000 80 prime property disperses away from the immediate south, east and west 70 (METRES) ELEVATION of Hyde Park. In fact the Knight Frank £2,500 60 Richmond office accounted for half of 50 the £10 million-plus sales in prime outer London in the 12 months to the middle RENTS PCM £2,000 40 of June 2014. 30 Prices have grown more quickly in £1,500 20 Richmond than any other area of south-west London in the first half of 10 2014, Knight Frank sales data shows, £1,000 0 and now regularly exceed £1,000 per square foot. Source: Knight Frank Residential Research / Vizzi Home 4 UK AUSTRALIA RUSSIA US FRANCE BRAZIL GERMANY SWITZERLAND CANADA SPAIN ITALY IRELAND REST RICHMOND 2014 RESIDENTIAL RESEARCH Of the total number of sales at Knight There is a similar correlation between FIGURE 5 Richmond versus other Frank’s Richmond office, a third were house prices and proximity to the park London boroughs for above £1,000 per square foot in the further south. six months to mid-June 2014 compared The higher prices to the north and to less than 10% in the previous west demonstrate the premium for the six months.