Market Review - West London Property

Sales Comment

By Keith Gorny, Director

2011 marks my fifteenth year of working in the Notting Hill and Holland Park property market. Whilst only a tenth of the time Marsh & Parsons has been operating in the area, its been a sufficient enough time to have worked through a wide variety of challenges and opportunities. While there have been peaks and troughs throughout that time our area has enjoyed a sustained period of remarkable growth.

I still remember my first sale in 1996 of a Northumberland Place house and my being astounded by the £540,000 price it commanded. In 2006 we sold the same house for £1,825,000, and I have just valued it for 2011 at £2,450,000. The correlation between London’s success as a global financial centre and West London’s property values is well documented, but our specific area’s rate of capital appreciation is largely unmatched.

Of course Notting Hill had some catching up to do. Many of our area’s recent arrivals, whose residency has contributed so much to our area’s success, would be amazed to learn of the riots and civil unrest synonymous with the area a mere thirty years ago. However "catch–up" in itself does not account for what might be considered one of Europe’s single biggest urban renewal success stories. Many commentators appear to be predicting a fairly gloomy outlook for the UK’s 2011 property market. Recent history has shown how unpredictable markets can be but I would venture that the qualities that have carried our area so far over the last couple of decades will see us through this period of economic austerity relatively well.

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Expanding our service

By Keith Gorny

After the fast paced drama of the preceding eighteen months the summer offered a welcome period of relative calm in the Central and West London housing market. An increase in confidence and a supply/demand imbalance has assisted in a rapid recovery with prices being supported at a level few had anticipated at the beginning of the year.

Marsh & Parsons have accounted for over 20% of all sale transactions in the Notting Hill/Holland Park area this year, our results support the encouraging view that our local market has passed a low point in terms of both values and activity.

The national picture has grown more positive with all indices showing a decrease in the rate of house price decline and that demand for property has risen, albeit from a very low base. The Bank of England’s mortgage approval figures, while well down on levels seen during the housing boom, have been rising month on month since their January low.

While reviewing recent activity in our local area this report will assess the evidence to suggest whether or not, after 15 years of house price rises ending in the worst financial crisis since the 1930s, this recovery will be maintained.

Sustainable Recovery or Momentary Reprieve

By Keith Gorny

The UK property market has been through the deepest, most sudden slump in living memory and no part of our local market has proven immune. Being particularly vulnerable to redundancies in the financial sector we saw capital values adjust more rapidly than in any other region. In 2008, transaction activity in Kensington and Chelsea fell off a cliff with the borough reporting the lowest number of exchanges since records began.

2009 has had a very different air. More positive data is reporting growing signs of recovery and while the market may remain fitful, it looks like activity, in our area at least, has passed its low point. Capital value decline has stopped and in some instances it has been reversed. Transaction levels are no longer choked by a lack of buyers or, as we will see later, a lack of finance but rather a severe lack of property supply.

An ever greater investment in the marketing of our clients’ properties through the largest most highly experienced team in the area has enabled us to produce some excellent results for our clients this year. Since January we have seen buyer registrations rise significantly, viewing levels increase at all levels and at the time of writing our Central London offices have conducted over 35 sealed bids.

This review will take a closer look at the make up of this activity before assessing some of the principal factors that will contribute to our local market’s performance going forward. While the possibility exists that this may be a false floor, housing began its recession long before the rest of the economy and our results suggest that it has been the first to show signs of recovery too.

The value of experience

By Keith Gorny, Director

As in all of London, the development of our area is peppered with tales of boom and bust. A multitude of investments that made fortunes while others were lost. It is a story that can be read in the stunning architecture that surrounds us today. The third Lord Holland and James Ladbroke were the first to appreciate the value of the area in creating the Holland Park avenues of detached mansions and townhouses of Ladbroke Square beloved of the worlds’ wealthy today. However, both developers were severely hit by the financial crash of 1825 and the subsequent slow down in building resulted in the surrounding land being given over to horse racing and the short-lived Hippodrome Race Course. As the race course failed and the market returned to normality the land reverted to Ladbroke and was re-leased for construction and a fortune was rebuilt. The magnificent villas that constitute Kensington Park Gardens, Stanley Crescent and Lansdowne Crescent resulted. Similar tales involving speculating Reverends, Calcutta Merchants, Colonels and watch makers abound, littering the path to where we are today - living and working in one of the very finest and sought after locations on the planet.