20 February 2016, The Times
There is no mistaking South Kensington for any other part of prime central London. Where else has so many museums, so many wide, leafy streets and so much French chatter coming from the children on their way to and from school? Right now, however, it shares one overriding similarity with its neighbours — a depressed housing market.
Transactions in 2015 across all price ranges in South Kensington — an area of London famed for its French buyers — were down 17.4 per cent compared with the previous year, according to property data company LonRes. The number of £5m-plus sales in the area dropped 45 per cent over the same period.
It is the same story as in the rest of prime central London. Higher stamp duty on homes priced above £937,500 coupled with economic jitters over oil price falls and slowing economic growth in China have undermined confidence and, with it, the number of transactions.
That malaise has hit prices. Knight Frank says the SW7 postcode has seen prices drop 3.3 per cent in the year to January 2016, making it the worst performing central London location aside from Knightsbridge. The buying agency Black Brick, for example, has just negotiated the purchase of a South Kensington flat for £545,000 below asking price — a 15 per cent reduction.
If that sounds like a bargain, don’t feel too sorry for local owners: they have done rather better over the longer term. Not only have they seen substantial capital appreciation — 45 per cent over the past five years and a remarkable 155 per cent since 2006, says LonRes — but they also enjoy what some describe as the prettiest parts of central London.
Estate agents regard Onslow Square and Onslow Gardens as the most desirable addresses in South Kensington, with their white-stucco period buildings and attractive gardens. Nearby Tregunter Road, The Boltons, The Little Boltons, Pelham Crescent, Rose Square and Harley Gardens are also popular. A few houses are split into flats but most remain family homes overlooking pretty squares.
“South Kensington has a very European feel, complete with a French lycée, good restaurants, the French market and European-inspired architecture,” says property consultant Charles McDowell — who specialises in buying and selling £5m-plus homes in the area.
French buyers remain a significant group, he says, despite the opening of French schools in less expensive areas such as Battersea and Wembley. “Since 2010, there’s been an increase of 40 per cent in the number of French moving to SW7 and it’s going up,” says Amy Rogers of the Carter Jonas estate agency.
Other agents say Italians and Greeks are buying too, adding to the area’s European feel. “It typically attracts fewer Middle Eastern or Russian buyers who prefer modern apartments and houses found in Belgravia,” says Charlie Bubear of Savills.
In fact, the lack of new, premium-priced pads is cited by some local agents as the reason prices have fallen more in South Kensington than in most neighbouring areas.
The dominance of renovated period properties has advantages, though. “South Kensington can offer substantial lateral space not often found in other prime central London districts. Large family-friendly flats offer a natural alternative to traditional Chelsea town houses arranged over five or six floors,” says Simon Rose of Strutt & Parker.
With demand sluggish, there is no shortage of stock. Savills is selling a recently refurbished, three-bedroom apartment in Onslow Gardens for £4.95m. It has 2,214 sq ft of internal space set within a grade II-listed period house. A four-bedroom house — small by the area’s standards at 3,100 sq ft — on Clareville Street is on sale for £6.5m through Lurot Brand estate agents.
At nearby Queen’s Gate, Knight Frank is selling a four-bedroom, 3,000 sq ft apartment for £6.5m, while on Hereford Square, a short walk from Gloucester Road Tube station, a six-bedroom family house is available through Aylesford International for £12m.
Soon on the doorstep of these period properties will be one of London’s biggest residential new-build quarters — and it might just help revive the flagging property market. “Earls Court’s regeneration, just 10 minutes’ walk from South Kensington, will have a huge impact,” says Robin Paterson of Sotheby’s International Realty. “At 80 acres it will be the same size as Soho.”
Rather than tempt buyers away from South Kensington, Paterson says the new district’s high-end retail and restaurants will bolster the area’s appeal. “South Kensington will benefit from being close to a regeneration area,” he says. “And, [in turn], Earls Court will benefit from being so close to one of London’s most prestigious locations.”
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