Savills World Research UK Residential Spotlight Kensington and Holland Park 2016 savills.co.uk/research 03 Spotlight | Kensington and Holland Park Market overview west and within close proximity luxury LOCatiONS to potteries and brickworks. These days, this trend has Kensington and Holland Park play host to certainly reversed and the area attracts some of Britain’s some of the capital’s most prestigious homes most successful entrepreneurs and artists. t the heart of the Royal Albert. These museums triggered Holland Park is one of the Borough of Kensington wider development of residential principal draws to the area A and Chelsea lies properties as landowners made itself. It stretches to 54 acres of Kensington and Holland Park, the most of the new roads, and in diverse parkland and includes a home to some of the capital’s 1868 Gloucester Road and South semi-wild area of woodland, a most prestigious addresses. Kensington underground stations Japanese garden, a cricket pitch The area is well known for were opened. and tennis courts. its fine architecture and Today, Kensington is an The type of housing most many notable attractions and extremely affluent area and is notable to Kensington and institutions, such as Kensington home to Kensington Palace Holland Park are the large Palace, the Victoria and Albert Gardens, well known as one of Victorian stucco houses and Museum and Imperial College. the most expensive and exclusive terraces which often surround roads in the world, its mansions a garden squares. The Phillimore Kensington combination of private homes and Estate roads are a good William 3rd purchased Nottingham foreign embassies. example of such properties. House, a Jacobean mansion in Elsewhere, larger homes have the village of Kensington as a rural Holland Park now mostly been converted alternative to Whitehall Palace in Before the end of the 19th into maisonettes or flats which 1689. However, Kensington didn’t century, much of Holland Park appeal to the large proportion begin its transformation from and the surrounding area (41%) of private rented agricultural land into the luxury belonged to Holland House until households in the area. London district we know it as the owners began to sell off today until the mid 19th century. parts of the land for residential Property prices Following the 1851 Great development. However, the In Kensington and Holland Park, Exhibition in Hyde Park, the South area was regarded as less than the average sale price in 2015 Kensington museums were built desirable and it was a struggle was £2.4m, 25% higher than under the direction of Prince to persuade people to live as far the average for the borough of Large Victorian stucco houses are found in both locations Kensington and Chelsea at in prime central London there of stamp duty in December £1.9m and nearly four and a half is a clear premium for size, and 2014, uncertainty surrounding times more expensive than the Kensington and Holland Park are the General Election and most London average. Unsurprisingly, no exception. Analysis shows recently the introduction of an houses are significantly more that properties under 1,000 additional 3% stamp duty for expensive than flats, with an square feet have an average “Additional Homes”. average sale price of £5.4m and price of £1,580 per square foot £1.8m respectively. compared to £2,650 per square Rental market In the prime markets of foot for properties over 5,000 Across Kensington and Holland Kensington and Holland Park square feet. Park the average monthly rent is the average price per square Price growth in Kensington £2,700 according to Rightmove. foot is just over £2,000, slightly and Holland Park has been very This ranges from just under higher than the prime central strong over the past 10 years, £2,000 per month for a 1 bed London average, although this with prices doubling over the property to over £11,000 per can vary significantly. One of period. However, the rate of month for a 5+ bed home. the key aspects that determines price growth has slowed recently In a similar pattern to the the price is the size of the and small falls have been sales market, in the prime property. Unlike most locations, recorded following the reform rental market the annual rent FIGURE 1 The Kensington and Holland Park housing market in 2014/2015 A look at where the sales happened and at what value KEY ● Over £3m ● £2m - £3m ● £1m - £2m ● Under £1m B A D C Average sale Wards price in 2015 A Holland £2.5m B Campden £2.4m C Abingdon £1.8m D Queen's Gate £3m Source: Savills Research using Land Registry 2016 per square foot often depends on the size of property. Across Kensington and Holland Park, the average annual rent is £57 per square foot, increasing to £78 per square foot for properties over 5,000 square foot. Another key factor influencing rent is the condition of the property, with those in a poor condition averaging just £45 per square foot. Rental values for prime properties in the area have Holland Park comprises 54 acres of diverse parkland been relatively stable since they recovered from the credit crunch FIGURE 2 in 2010 because supply and What would the same property sell or rent for demand remain well-balanced. on our featured roads? Demand TERRACED HOUSE OF APPROX. 2,000-3,000 SQ FT As with many other prime central London districts, international buyers and tenants are an Location Postcode Sale Price Rental Value* important source of demand for prime property in Kensington Pembroke Square W8 £4.25m - £5.75m £2,100 - £2,500 and Holland Park. In 2014/15 40% of purchasers and 72% of tenants were from overseas, Sheffield Terrace W8 £5.25m - £5.5m £3,500 - £4,500 with those from Western Europe being the most dominant. Scarsdale Villa W8 £5.35m - £7m £2,500 - £3,500 Given the high property prices, it is unsurprising that Douro Place W8 £5m - £7m £4,000+ the majority of buyers already living in the UK were moving from within the local area. Those purchasing their main THREE BEDROOM apartMENT OF CIRCA 2,000 SQ FT residence accounted for 56% of purchasers in 2014/15, with the Location Postcode Sale Price Rental Value* remaining 44% buying a second home or investment. Commuting to the key Kensington Court W8 £4.1m - £4.6m £2,500 - £3,000 employment hubs is quick and convenient from Kensington Campden Hill Court W8 £3.8m - £4.3m £1,500 - £2,300 and Holland Park. As such, demand in the prime rental Wynnstay Gardens W8 £3.6m - £4m £1,500 - £2,100 market is driven by those renting for employment relocation, who accounted for Iverna Court W8 £3.5m - £3.85m £2,000 - £2,400 64% of tenants over the past Source: Savills Research *per week two years. n Spotlight | Kensington and Holland Park Development HIGH QUALITY LUXURY SCHEMES Residential development in Kensington and Holland Park currently comprises a number of small luxury schemes n Kensington and Holland scheme by Chelsfield, has set a basement policy which Park new development is the precedent for high quality restricts subterranean I a rarity, consisting of small luxury schemes in the area. developments to a single storey luxury developments rather than There are a handful of schemes and bans it on listed buildings, large scale development found which have recently obtained pushing buyers towards new further west, such as Berkeley’s planning permission in early build product which can cater 375 Kensington High Street and 2016; Allen House (AHL Bidco for demand for spas, swimming Capco’s regeneration scheme Sarl, 44 units), Duke’s Lodge pools and private cinemas. n at Earl’s Court to the south. (Project Dukes Ltd, 24 units), This is partly because there and The Odeon (Minerva, 63 is limited land available and units). Grainger’s scheme on it is relatively difficult to get Young Street and Native Land/ planning in the Royal Borough of Grosvenor’s Holland Park School Kensington and Chelsea (RBKC); are under construction and likely the challenge for developers is to to be the next to complete. engage the local community and Purchasers in these locations Only a handful of schemes concentrate on creating genuinely are drawn by the proximity to have recently obtained excellent schemes. green spaces and accessibility planning permission The recently completed into central areas. RBKC is Holland Green, a 62-unit the only borough to introduce Holland Green, a recently completed scheme 2016 forecast to continue improving over the next five years, the Outlook attractiveness of London will THE WIDER CONTEXT continue to strengthen for those looking to relocate. Kensington and Holland Park are well placed Both locations are well-placed to draw on any to draw on this demand as increased demand for sales and rental market they are already popular locations for those moving for he prime London Property prices in Kensington employment reasons. housing market has and Holland Park are forecast, The rental market in London is T faced a number of in line with prime central very dependent on the balance challenges over recent years as London, to remain broadly between the supply and demand a result of a changing political flat through 2016 and most of of properties. Where there are and fiscal environment. 2017 due to the increased high levels of new build stock The reform of stamp duty tax burden and the political coming to the rental market announced in the 2014 Autumn uncertainty stemming from the simultaneously, rental values are Statement has had a bigger May mayoral election and being put under pressure.