Victoria goes upmarket — but remains a bargain for central London
Financial Times FT.com
New high-end homes are smartening up the area around the transport hub, but it is still cheaper than Mayfair and Belgravia
For the most part, central London’s traditional prime property hotspots have been feeling the chill in recent years. Average prices have fallen 13.2 per cent since mid-2014, according to Savills.
Stamp duty changes in December 2014 increased the cost of homes above £937,500, of which central London has a high concentration. An additional 3 per cent levy on second homes, introduced in April 2016, has made things worse. Affluent individuals from abroad have, for decades, parked money in central London property. Most have favoured recognisable trophy areas — Knightsbridge, Chelsea and Mayfair, for example. With few of these buyers based in London, the second-homes tax has ramped up purchase prices further, providing an additional brake on demand.
The headline price figures conceal pockets of relative resilience, however. One striking example is Victoria.
Homes in the Victoria area in the year to February sold for, on average, 2.9 per cent more than they did in the previous 12 months, according to Land Registry data collected by Savills. By contrast, prices in the Savills prime central London index fell 6.9 per cent in the three months to March 2017, compared with the same period a year before. Since London’s prime market peaked in June 2014, prices in Victoria have fallen 6.1 per cent, much less than the 13.2 per cent average for prime central London.
Yet homes in Victoria are still a bargain compared with nearby hotspots. On average, homes sold in the four months to April in Victoria cost £1,311 per sq ft, according to LonRes, less than two-thirds of the Mayfair average of £2,022, or £2,030 in Belgravia.
Victoria has a rich history of lagging its neighbours. “Westminster proper consists of two very different parts,” wrote Cardinal Wiseman, the first Archbishop of Westminster, in a pamphlet in 1850. One, he continued, comprised Westminster Abbey, its adjacent palaces and the Royal Parks (an area that, today, would include parts of Belgravia and Mayfair). The side nearest Victoria, by contrast, was a long way short of desirable. “Close under the Abbey of Westminster there lie concealed labyrinths of lanes and courts, and alleys and slums, nests of ignorance, vice, depravity, and crime, as well as of squalor, wretchedness, and disease.”
The same year, Charles Dickens lamented how “the blackest tide of moral turpitude that flows in the capital rolls its filthy wavelets up to the very walls of Westminster Abbey”.
The wretched focus in both cases was the area south of Victoria Street, including what are now St Ann’s Street and St Matthew Street. Nicknamed Devil’s Acre, it was one of London’s most infamous slums.
Development along Victoria Street eventually turned the area around (as the slum became a building site, occupants — at least the fortunate ones — were rehoused in London’s early social housing).
Today, similar building work near the train and bus stations aims to narrow the desirability gap between Victoria and its better-heeled neighbours.
Nina Coulter, of Savills’ residential development team, reckons that more than £1bn has been ploughed into building smart new homes in the area — most will be completed by the end of next year. Big schemes — including Kings Gate and Nova, the sprawling mixed-use development adjacent to Victoria rail station — have added hundreds of new homes already. A series of high-end refurbishments along Buckingham Gate has added to the supply. In Nova’s residential building, Savills is selling a three-bedroom flat with a balcony for £7.2m. Nearby, in Castle Lane, Strutt & Parker is selling a new three-bedroom flat for £2.48m as part of a development of 28 flats and three converted townhouses.
Victoria’s building boom is changing the profile of the area’s residents. “The broader market has become much more diverse,” says Matthew Morton-Smith of Savills’ Westminster office.
“Much of the area is within reach of the division bell [the Parliament bell that signals to members they have eight minutes to get to the House to vote], so the typical buyer was once an older English pied-à-terre-owning parliamentarian or civil servant,” he says. By last year, a third-floor mansion block flat behind the station that he was selling attracted viewings from 11 different nationalities, he says.
Cycling parliamentarians might try the three-bedroom apartment in Kings Gate on Victoria Street, on sale through Savills for £2.9m. The Palace of Westminster is more than 10 minutes’ walk away, but less than five by bike.
All this renovation should catch the eye of London’s top-end investor buyers, too. The double-whammy of stamp duty increases has forced them off their beaten track, says Robert Oatley, head of Knight Frank’s Victoria and Westminster office. “Many are now more price-sensitive. They are becoming less narrowly focused on particular central London postcodes and increasingly looking for the sort of high-quality developments and amenities on offer in Victoria.”
● The average prices of a prime home in Westminster (including Victoria) is £3.8m, compared with £4.7m in prime central London, according to Savills
● The quickest trains from Victoria station to Gatwick airport take 30 minutes
● Earlier this week, Rightmove was listing 43 homes in Victoria on sale or sold subject to contract for less than £500,000
What you can buy for . . .
£500,000 A one-bedroom flat with views of the gardens of Buckingham Palace
£1m A new-build, two-bedroom flat on Longmore Street
£3m A new three-bedroom flat in the Kings Gate development
More homes at propertylistings.ft.com
If you would like to view VI Castle Lane or discuss the properties, please do not hesitate to get in touch with our agent Strutt & Parker by email email@example.com or via our social media channels @SonsandCoLondon