Expert research and professional advice to help you make the best decision about residential property in Knightsbridge
Knightsbridge holds its place as one of the most, if not the single most, sought-after location in prime central London. It has developed a particular appeal to international buyers over the past 50 years who have been attracted to its unique living environment, which is underpinned by the quality of its housing stock and access to an array of cultural amenities; commensurate with London’s position as a global world city. Savills Research shows that these buyers have remained surprisingly active in the market in recent years despite the challenges presented by Brexit and the pandemic. With values 19% below where they were in 2014, Knightsbridge looks well set to benefit from a recovery in prime central London values; which has been a long time coming.
Knightsbridge is home to some of the most exclusive addresses in central London; from the iconic One Hyde Park and its forerunner The Knightsbridge, to long-established super prime locations such as Montpelier Square, Egerton Crescent, Trevor Square, Cadogan Square & Place, Lennox Gardens and Hans Place. Indeed, it vies with neighbouring Belgravia and Mayfair for the crown of the most desirable district of the UK’s capital city.
Knightsbridge has a long history of attracting demand from domestic and global ultra-high net worth individuals (UHNWIs). Since the arrival of buyers from the Middle East during the late 1970s, it has been at the forefront of central London’s development and evolution as a home to the world’s most affluent families.
While reacting to the ups and downs in the global economy, much like surrounding areas at the heart of the capital, Knightsbridge has seen the value of its prime housing stock rise dramatically in the 35 years to the middle of 2014.
Over that period, prices of prime central London homes increased by an average of 5.7% above the underlying rate of inflation on an annualised basis. That means, despite the challenges faced by the market in the past eight years, long-term owners of homes in Knightsbridge have accumulated considerable housing wealth.
However, in recent years the market has confronted a number of headwinds – from increased exposure to taxation (particularly in the form of stamp duty), to considerable domestic political uncertainty caused by the decision to leave the EU, the disruption of a global pandemic and the tragic war in Ukraine.
Property looks good value in a historical contextLucian Cook, Head of Residential Research
Despite a recent return to annual house price growth (+1.8% in the year to March 2022), these factors have left prices of prime houses and flats 19% below where they were in mid-2014 on average. This has resulted in property looking good value in a historical context.
Nonetheless, on a £ per sq ft basis, prices in Knightsbridge between 2017 and 2021 continue to carry a premium of 25% above the prime central London market. Furthermore, despite the recent constraints on international travel, Knightsbridge has continued to maintain a wide international buyer profile, with non-UK nationals representing more than half (62%) of buyers in the five years to the end of 2021.
In keeping with its position within central London and the buyer profile, these buyers have a greater propensity to be buying a second home or investment property than across central London as a whole.
For investment buyers, a return of rental growth over the past 12 months will have been particularly welcome. Having fallen by 7.8% in the year to the end of March 2021 during the height of the pandemic, rental values of prime Knightsbridge properties rebounded by 9.2% over the remainder of 2021 and increased by a further 2.9% in the first quarter of this year.
Demand from global UHNWIs in search of a base in the heart of London is underpinned by the accessibility that Knightsbridge offers to a unique premium retail offering (not least because of the draw of Harrods as an internationally recognised brand). It is further augmented by the proximity to the cultural amenities afforded by the museums, art galleries and concert halls of neighbouring South Kensington.
This, combined with the architectural quality of both Knightsbridge housing stock and the wider built environment – there are no fewer than 557 listed buildings in the wards of Knightsbridge & Belgravia and Hans Town & Brompton – secures its position as one of the most desirable micro-locations in the global network of prime residential real estate.
For this reason, we believe that the Knightsbridge market is well placed to benefit from a recovery in the prime central London market.
Over the period of the next five years, Savills Research expects prices across the prime central London market to deliver strong growth as we see an increase in international travel as the effect of the pandemic subsides.
The timing of a recovery has become more uncertain as a result of the tragic war in Ukraine. Russian buyers themselves have not been a major force in the market for some years, being just one part of a diverse pool of international demand. While the market may take some time to adjust to measures introduced to increase the transparency around overseas ownership, the biggest driver of demand will be the impact on global wealth generation.
As we have learnt from the experience of the pandemic, there are many checks and balances in this area. The increase in the price of oil is likely to result in a rise in demand from Middle Eastern buyers. The continued growth in wealth generation from sectors such as tech and life sciences are expected to offset pressures from other parts of the global economy
Despite being renowned for arguably the most famous of London’s super prime developments (One Hyde Park), Knightsbridge now has very few new homes set to enter the market over the next few years. The small number of residential schemes underway are set to enhance the retail offering in this central London shopping district. Chelsfield is currently extending The Knightsbridge Estate, providing 33 new apartments to rent. Burberry has opened its new 16,000 sq ft flagship store at 1 Sloane Street and Apple has taken both 17 and 23 Brompton Road for a 20,000 sq ft flagship store scheduled to open in Q2 2023.
Also under construction is a development site located by Harvey Nichols on Knightsbridge, which is also expected to attract high-end retail on the ground floor, with 15 residential apartments above to rent. Nearby, at Lancelot Place, a rare opportunity to purchase a new scheme of five houses will shortly present itself, with construction expected to start within the next year.
Knightsbridge is a world-renowned prime central London address, known for its museums, international shopping and proximity to the West End. That’s just one part of what draws so many people to live here. Many have been motivated to move because of the range of properties available and that trend has continued so far in 2022.
Over the past two years, we’ve seen steady interest from a range of international buyers. Buyers and tenants come in all shapes and sizes, but notably, we’ve seen a real uptick in those looking for outdoor space due to the pandemic.
As always, freehold houses with outdoor space have proven the most popular. Following Covid-19 and increased home working, having a home office is a feature that’s starting to climb up wish lists, though a private garden remains number one.
Whatever your property needs in Knightsbridge, we can guide you to make the right decision.