London’s posh Mayfair is becoming the exclusive haunt of millionaires only, with homes priced below a million pounds are set to become totally extinct in the neighbourhood and wider West End area of the UK capital, new research has revealed.

Less than 5 percent of homes now sold in Mayfair priced below seven figures; none priced below £750,000 ($1.04 million) and the majority sold (49 per cent) now priced between £2 million to £10 million ($2.8 million and $13.9 million). 

These are just some of the findings of new 2016 research by Wetherell, with data analysis by Dataloft, the market intelligence group. 

The 2016 Wetherell survey looked at the price of all homes sold over 2015 and 2014, and also analysed sold values in earlier years dating back to 1985, the date of the first ever Mayfair residential  market report published by Wetherell’s CEO Peter Wetherell. 

The Wetherell data found that in 2015, the majority of homes in Mayfair (49 per cent) sold at prices between £2 million to £10 million, with another 11 per cent selling for prices above £10 million. 

Forty-one per cent of homes sold were priced below £2 million, but 95 per cent of these were priced between £1 million and £2 million. Just a handful were priced below £1 million, and of these 60 per cent were priced over £950,000 with the couple priced between £750,000 and £950,000 being “special cases” – tiny (circa 300-350 sq ft) studio flats on short (around 40-year) leases. 

Wetherell observes that the figures for 2014 were almost identical, and over the last 10 years the number of Mayfair homes sold for less than £1 million has dwindled to extinction. Homes in Mayfair currently sell for an average price of £4.8 million (£2,400 per sq ft), up from £4.5 million (£2,280 per sq ft ) in 2014. There are now virtually no houses (less than 3 per cent) in Mayfair sold for less than £2 million, with the vast majority (80 per cent) sold now priced above £10 million. 

Given these dramatic trends Wetherell calculates that within the next 12-24 months, sub-£1-million apartments and sub-£2 million houses will become extinct across Mayfair and the neighbouring ultra-prime parts of the West End. 

By looking back just over 30 years to the data from the first ever Mayfair residential report published by Peter Wetherell, the staggering transformation of Mayfair residential values becomes apparent. In 1985, over 90 per cent of homes sold in Mayfair were priced below £1 million and 80 per cent of one and two-bedroom apartments were priced below £300,000. 

In 1985 the average price of a Mayfair one bed flat was £85,000 to £150,000 with a two-bed averaging £150,000 to £275,000. In Balfour Place a two-bedroom apartment in 1985 was priced at just £225,000, now valued at over £2 million.

In Mayfair’s luxury new homes market, newly built premium apartments in 1985 averaged £285,000 in price, they currently average £4.25 million to £4.5 million. 

There are now typically 8-12 new homes projects per year in Mayfair, selling at prices from £2,500 to £5,000+ per sq ft; during the 1980s there were just 1-2 new developments per year selling for £300 per sq ft. 

The other big change in Mayfair over the last 30 years has been the types of homes being sold. Back in 1985 there was a balance between house and flat sales. However over the last few years, over 80 per cent of sales are apartments: 82 per cent of sales in 2014 and 86 per cent in 2015. 

This reflects the large increase in ’Knightsbridge-style’ super-luxury apartment schemes being built and sold in Mayfair over the last few years: enabling Mayfair to retake the property crown from its rival neighbor Knightsbridge. 

Peter Wetherell says: “Over the next 12-24 months apartments priced below £1million and houses below £2 million will, like the dodo, become extinct. This reflects the continuing upward surge in residential 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.”

he continues: “Despite the economic triple-whammy of low/falling oil prices, China’s economic slowdown and S(UK) stamp duty/tax adjustments Mayfair residential values and the appetite amongst high-net-worth buyers for Mayfair housing stock has continued to rise steadily upwards. It’s a cautious market at present, but for good quality homes, correctly priced, there are deals to be done. Comparing 2014 and 2015 data, the volume of annual sales actually rose almost 10 per cent (8.2 per cent) and average prices rose by almost 7 per cent (6.9 pre cent). This and the long-run 30-year data clearly shows that Mayfair is the exceptional place to invest your money in luxury residential property in London.”

 “For investors, both family/private and corporate, Mayfair real estate is an attractive and lucrative island of stability and long-term investment opportunity in an increasingly turbulent and unsettling world. Parts of the Middle East, Africa and Asia are troubled by terrorism, wars and religious and ethnic rivalry, given this backdrop Prime Central London and Mayfair in particular makes for a compelling and highly appealing place to investment via purchasing high quality residential or commercial property.”

Wetherell forecasts that residential values in Mayfair will remain – reassuringly – stable over 2016, with little change between this year, 2015 and 2014. 

Peter says: “We may see a slight uplift, but its effectively “more of the same”. 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 £1million – it’s a clear indication of the outstanding value that Mayfair property offers investors.”