Is the £1 million Property in Mayfair set for extinction?

While Brexit apprehension may have cooled housing markets elsewhere in London, if anywhere is set to be seemingly unaffected, it’s Mayfair.

A report commissioned by local estate agents Wetherell has revealed that property costing less than £1 million is set to disappear from the market altogether, and it’s expected to happen quickly. In fact, based on the report’s findings, the established estate agents predict that there will be nothing available to buyers for less than £1 million within the next 12 to 24 months.

Mayfair’s enviable geographic positioning in the heart of London coupled with the affluent lifestyle here has made it one of the city’s most desirable neighborhoods, something that has pushed up the demand in an area where supply is short. This in turn has been reflected in the rise in prices, as less than five percent of properties are now sold for anything under seven figures, and no properties are sold for less than £750,000. A couple of properties exchanged hands with prices between the £750,000 and £950,000 bracket, but only because these were deemed to be “special” cases. Generally speaking, if you want to buy in Mayfair, a million is the very minimum you’ll need.

Mayfair – a “millionaire’s only” market

The report used data analysis from Dataloft to look at local sold prices over the 2014-2015 period.

The findings showed that nearly half of all properties sold (49 percent) were priced between £2 million to £10 million, with another 11 percent selling for more than £10 million. According to Peter Wetherell, CEO of Wetherell, this pricey trend is unlikely to dissipate anytime soon. “Over the next 12-24 months apartments priced below £1 million and houses below £2 million will, like the Dodo, become extinct,” he says. “This reflects the continuing upward surge in resi-values in Mayfair, a reflection of both global demand and short supply, and also the large increase in super-luxury apartment schemes being built and sold in Mayfair over the last few years. Mayfair is the new Knightsbridge you could aptly say, the fashionable place for luxury property.”

If anyone is qualified to determine whether Mayfair has become the capital’s latest property hotspot, it’s Wetherell, as they have been collecting data on the local residential trends for 30 years. In their first report, a two-bedroom flat in Balfour Place sold for £225,000 back in 1985. Today, that same flat is now worth over  £2 million. This figure pales in comparison when looking at other local properties on the market; a three-bedroom apartment boasting views over one of London’s most coveted postcodes, Grosvenor Square, was listed for an eye-watering £11,500,000 earlier this year. The average property price in London as of June 2016 was £600,076, and while considerably inflated when looking elsewhere in the country, this figure is a sound benchmark to demonstrate just how popular real estate in Mayfair really is – and how pricey.

So while Brexit and the ensuing economic uncertainty may impact the housing market across the UK and indeed London in general, Peter is unconcerned about the future of residential property in Mayfair; if anything, this is one market tipped to be able to withstand the changing tide. “We may see a slight uplift, but it’s effectively ‘more of the same’,” he says. “Supply and sales volumes are less than in past years, but values are stable and rising gradually. Mayfair is like a strong ocean liner sailing in a protected fjord, out in the wider (global) oceans things might be turbulent and stormy, but protected within our anchorage the Mayfair market is reassuringly calm and stable. As our 30-year data index shows this stable long-term rise makes for an outstanding return on investment. Back in 1985 virtually no homes were valued at over £1 million, thirty years later and virtually no homes are valued below £1 million – it’s a clear indication of the outstanding value that Mayfair property offers investors.”