A Perfect Combination

16 May 2016, by Kirsty Bennison

Richmond provides the ideal balance between town and country, making it a highly sought-after location

 

Richmond upon Thames is an affluent town in south-west London. As its name suggests, it occupies a prime spot on the south side of the Thames, some 10 miles away from the centre of the city.

It is a highly sought-after location for young professionals, families and even the famous to live. The market offers a wide range of homes, from smaller flats and cottages to large Georgian and Victorian terraces and detached family homes on Richmond Hill and around the park.

Richmond has strong royal connections and was named after Richmond Palace, which was built by Henry VII in the 16th century. The palace was located on the banks of the Thames and survived until 1650 when it was sold and knocked down.

It wasn’t until the 18th century that further development occurred, shaping the Richmond we know today. The building of Richmond Bridge between 1774 and 1777, making it the oldest surviving Thames bridge, the many Georgian terraces, such as those around Richmond Green, and the addition of the railway station in 1846, all helped Richmond become the well loved and connected town it is today.

One notable claim to fame is that Richmond Hill commands breathtaking aspects down to the river that are the only views in England to be protected by an Act of Parliament, the Richmond, Ham and Petersham Open Spaces Act passed in 1902.

Its location on the Thames and river promenade, Richmond Park, the largest of the capital’s eight Royal Parks stretching to 2,500 acres and attractive high street all add to the area’s appeal. Yet for all this open space, it is only nine miles from London’s West End and 19 minutes by train to Waterloo, making it very accessible to the centre of London.

 

 
Richmond offers a wide variety of homes

Property prices

In 2015, the average sale price in Richmond was £1m, 32% higher than the average for the borough of Richmond upon Thames according to the Land Registry. Richmond’s property prices achieve a premium over neighbouring locations and comparing the average sale price of terraced houses highlights this. In 2015, the average price paid for a terraced house in Richmond was £1.2m, compared to £941k in St Margarets, £765k in Strawberry Hill and Teddington, and £618k in Petersham and Ham.

Living in close proximity to one of Richmond’s many green spaces comes at a price. Properties within 100m of green space command a premium of 12% compared to others in the area on a £ per square foot basis and if the property has a direct view of the park/green, the premium increases to 24%.

Prime property values in Richmond have increased significantly over the past 10 years, rising by 105.4% on average. However, following such significant price rises, the rate of growth has slowed recently, with average values up only 2.3% over the 12 months to March 2016. This is due to pressures from the increased stamp duty tax burden and political uncertainty generated by the London mayoral election and EU referendum.

FIGURE 1

The housing market around Richmond in 2015

A look at where the sales happened and at what value

 
Figure 1

Source: Savills Research using Land Registry

Rental market

Across the four areas highlighted on the map (Figure 1), rental values range from around £1,300 per month for a one-bed to over £4,300 for a property with five or more bedrooms, according to Rightmove. Similar to the sales market, rents achieved in Richmond command a premium to the wider area. This is most evident for larger properties, as rental values for a five-bed property in Richmond are on average almost double rents paid in Teddington.

Although Richmond is an expensive option compared to nearby areas, it does offer a significant discount to prime central London. The average £30 per square foot annual rent in Richmond is around half the prime central London rent.

A good balance between supply and demand means that prime residential rental values have remained relatively flat over the past year. Over the past five years, prime Richmond rents have increased by 5.8%, outperforming the south west London average.

Demand

Over three quarters of buyers in Richmond since 2014 are purchasing their main residence, according to our analysis, while a small proportion are buying an investment or second home. Of those buying a main residence, 70% are upsizing from their current property.

These numbers emphasise Richmond’s popularity with families. Living close to good schools is a top priority, with 64% of buyers having one or more children. The borough is home to 52 schools, with various highly regarded state and private schools being located in Richmond itself.

The majority of buyers move from within the borough of Richmond upon Thames with those from central London boroughs accounting for 6% of purchasers. International buyers, although not dominant in this part of prime London, are also an important source of demand. Since 2014, they have accounted for 23% of purchasers, with families from Western Europe the most prevalent.

In the rental market, just over 50% of tenants are from overseas. In a similar pattern to the sales market, the majority of tenants are moving within the borough, although there is a slightly higher proportion (11%) moving from central London. The majority of tenants (66%) are renting for employment relocation, a significantly higher proportion than the average across prime London, as commuting to the key employment hubs from Richmond is quick and convenient.

FIGURE 2

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

 
Figure 2

*per month

Source: Savills Research

 

 
A prime spot on the south side of the Thames
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