The property price trends market in Kensington and Chelsea is quite unique and, to an extent, independent from the overall central London market. This is because the real estate market in the Borough is highly dependent on relatively wealthy, and very wealthy, local and foreign buyers, as well as upmarket tenants.Therefore, even though the UK Government has been trying to help the property sales market by granting temporary relief on stamp duty payments until March 31st, 2020, with many of the higher-end overseas investors unable to get to the UK to buy real estate, the market in the Borough of Kensington and Chelsea is very much in a “wait and see” situation.
However, it’s fair to say that many high-end buyers are, perhaps, less likely to be under mortgage stress or be under any major pressure to sell. Accordingly, even though the upper echelons of the real estate market in Kensington and Chelsea currently lacks some direction, it may simply be a question of waiting for the issues related to the pandemic to subside.
The Borough of Kensington and Chelsea is an upmarket inner London Borough, albeit one of the smallest boroughs in London by size. Starting with a long frontage to the River Thames, and its various road and rail bridges to the south bank of the river, it stretches to Westway (a major arterial road route in and out of London) in the north.
The Borough includes affluent areas such as Notting Hill, Kensington, South Kensington, Chelsea, and Knightsbridge and contains many of the most expensive, ultra-prime residential properties in the world.
Located to the west of the City of Westminster and east of the London Borough of Hammersmith and Fulham, providing excellent access to all areas of the city, the Borough is both a favoured residential area and diplomatic area with embassies in Belgravia, Knightsbridge and Kensington Gardens. It’s very well-known for its extensive shopping areas and is home to a number of world-famous department stores such as Harrods, Peter Jones and Harvey Nichols.
In some ways the Borough can be considered as a “late developer” in London property market terms as it remained largely surrounded by fields until the mid-19th century. Thereafter, residential development accelerated alongside rapid industrialisation and the introduction of the capital’s extensive transport network. Some 64% of the housing stock is from pre-1900 with, typically, limited additions of new supply annually; indeed, over the last 20 years, the stock of housing has only increased by around 3% in total. The vast majority of the housing stock in the Borough is terraced or semi-detached houses, plus a high percentage of purpose built or converted flats.
Demand for property in Kensington and Chelsea is mainly from British people, comprising almost 59% of the population in the area, although various high-end residential enclaves are popular with Asian people from Hong Kong, China and Singapore, as well people from the Middle East.
Kensington and Chelsea has a high concentration of stately homes and luxury properties is one of the most desirable places to live in London. It is largely an affluent area with rents typically above both the London and national average.
In terms of lifestyle, the Kensington and Chelsea Borough achieves a good balance between local identity and international appeal, with the overall village-type atmosphere and community spirit setting it apart from other smart, wealthy London boroughs.
An emerging requirement when looking to buy London real estate is easy access to green, outside spaces. The Royal Borough of Kensington and Chelsea is highly sought-after in this regards and it has nearby green public spaces of the 350-acre Hyde Park, Kensington Gardens, and Holland Park, plus a number of private gardens such as Bramham Gardens, Earls Court, SW5, or Ovington Square Garden, Knightsbridge, SW3.
According to Rightmove, properties in Kensington and Chelsea had an overall average price of £2,260,284 over the last year. The majority of sales were flats, selling for an average price of £1,545,723, with terraced properties at an average of £3,972,209 and semi-detached properties achieving an average of £9,386,882.
Overall, however, the property trends in Kensington & Chelsea market was relatively stable with a rise in prices of up to 0.95% reported over the last 12 months, and some 7% up on the 2017 average peak of £2,109,216.
In the last 6 months, overall demand for rental properties has fallen as uncertainties regarding the short-term business environment took hold. The number of new lets on a monthly basis were some 25 per cent lower than in the same month in 2019, with the average rent now being £779 per week.
There has also been an associated increase in units available to rent, especially as many Airbnb landlords have decided to list their homes on the long-term rental market in the absence of short term tenants. Since May, about 12% of all the new homes available to rent were previously let on a short-term basis. Accordingly, the average rent in inner London in July was 8.4% lower than in July 2019.
In prime boroughs in central London such as Kensington and Chelsea, where international and even national buyers have been unable to view homes because of travel restrictions, prime registrations were down nearly 20 over the last few months. In fact, it is anticipated that prime house prices may fall 2 per cent over the next year. In any event, for any owner contemplating selling, letting or just wishing to have an up-to-date assessment of the value of their property it’s easy to obtain an instant online valuation from Propertalis to help you with your decision making.
And, so, what of the future for property trends in Kensington & Chelsea? As unclear as matters seem right now, taking a long-term view, a 3-6 month lull in price increases may be a good thing for the luxury central London property market. In any event, there are still going to be buyers out there for ultra-prime residential property as they are insulated in many ways from the current economic malaise.
Provided the shoots of economic recovery become established, the real estate market in Kensington and Chelsea should see a continuation of its upward value trend heading into Q3 2021. However, the expectation is for slower price growth than after previous downturns due to the pandemic’s impact on the global economy and overall wealth generation.
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