Kensington and Holland Park

Kensington and Holland Park
 
Luxury Locations

10 June 2016, by Sophie Chick

Kensington and Holland Park play host to some of the capital’s most prestigious homes

 

At the heart of the Royal Borough of Kensington and Chelsea lies Kensington and Holland Park, home to some of the capital’s most prestigious addresses. The area is well known for its fine architecture and many notable attractions and institutions, such as Kensington Palace, the Victoria and Albert Museum and Imperial College.

Kensington

William 3rd purchased Nottingham House, a Jacobean mansion in the village of Kensington as a rural alternative to Whitehall Palace in 1689. However, Kensington didn’t begin its transformation from agricultural land into the luxury London district we know it as today until the mid 19th century.

Following the 1851 Great Exhibition in Hyde Park, the South Kensington museums were built under the direction of Prince Albert. These museums triggered wider development of residential properties as landowners made the most of the new roads, and in 1868 Gloucester Road and South Kensington underground stations were opened.

Today, Kensington is an extremely affluent area and is home to Kensington Palace Gardens, well known as one of the most expensive and exclusive roads in the world, its mansions a combination of private homes and foreign embassies.

Holland Park

Before the end of the 19th century, much of Holland Park and the surrounding area belonged to Holland House until the owners began to sell off parts of the land for residential development. However, the area was regarded as less than desirable and it was a struggle to persuade people to live as far west and within close proximity to potteries and brickworks.

These days, this trend has certainly reversed and the area attracts some of Britain’s most successful entrepreneurs and artists.

Holland Park is one of the principal draws to the area itself. It stretches to 54 acres of diverse parkland and includes a semi-wild area of woodland, a Japanese garden, a cricket pitch and tennis courts.

The type of housing most notable to Kensington and Holland Park are the large Victorian stucco houses and terraces which often surround garden squares. The Phillimore Estate roads are a good example of such properties. Elsewhere, larger homes have now mostly been converted into maisonettes or flats which appeal to the large proportion (41%) of private rented households in the area.

 

 
Large Victorian stucco houses are found in both locations

▲ Large Victorian stucco houses are found in both locations

Property prices

In Kensington and Holland Park, the average sale price in 2015 was £2.4m, 25% higher than the average for the borough of Kensington and Chelsea at £1.9m and nearly four and a half times more expensive than the London average. Unsurprisingly, houses are significantly more expensive than flats, with an average sale price of £5.4m and £1.8m respectively.

In the prime markets of Kensington and Holland Park the average price per square foot is just over £2,000, slightly higher than the prime central London average, although this can vary significantly. One of the key aspects that determines the price is the size of the property. Unlike most locations, in prime central London there is a clear premium for size, and Kensington and Holland Park are no exception. Analysis shows that properties under 1,000 square feet have an average price of £1,580 per square foot compared to £2,650 per square foot for properties over 5,000 square feet.

Price growth in Kensington and Holland Park has been very strong over the past 10 years, with prices doubling over the period. However, the rate of price growth has slowed recently and small falls have been recorded following the reform of stamp duty in December 2014, uncertainty surrounding the General Election and most recently the introduction of an additional 3% stamp duty for “Additional Homes”.

FIGURE 1

The Kensington and Holland Park housing market in 2014/2015

A look at where the sales happened and at what value

 
Figure 1

Source: Savills Research using Land Registry

Rental market

Across Kensington and Holland Park the average monthly rent is £2,700 according to Rightmove. This ranges from just under £2,000 per month for a 1 bed property to over £11,000 per month for a 5+ bed home.

In a similar pattern to the sales market, in the prime rental market the annual rent per square foot often depends on the size of property. Across Kensington and Holland Park, the average annual rent is £57 per square foot, increasing to £78 per square foot for properties over 5,000 square foot. Another key factor influencing rent is the condition of the property, with those in a poor condition averaging just £45 per square foot.

Rental values for prime properties in the area have been relatively stable since they recovered from the credit crunch in 2010 because supply and demand remain well-balanced.

Demand

As with many other prime central London districts, international buyers and tenants are an important source of demand for prime property in Kensington and Holland Park. In 2014/15 40% of purchasers and 72% of tenants were from overseas, with those from Western Europe being the most dominant.

Given the high property prices, it is unsurprising that the majority of buyers already living in the UK were moving from within the local area. Those purchasing their main residence accounted for 56% of purchasers in 2014/15, with the remaining 44% buying a second home or investment.

Commuting to the key employment hubs is quick and convenient from Kensington and Holland Park. As such, demand in the prime rental market is driven by those renting for employment relocation, who accounted for 64% of tenants over the past two years.

FIGURE 2

What would the same property sell or rent for on our featured roads?

 
Figure 2

*per week

Source: Savills Research

 

 
Holland Park comprises 54 acres of diverse parkland

▲ Holland Park comprises 54 acres of diverse parkland

placeholder

Subscribe to Savills research

 

Would you like to be notified via email about new research?