Date Published 30 May 2016
Although in general most of the enquiries I receive week-in week-out revolve around different Marylebone flats, lately a lot of interest has been brought to my attention regarding Mews properties and the selection of streets which largely encompass them. One of the most captivating conversations I undertook a couple days ago, involved a phone call from a business-woman who has been involved in property investment for the last 20 years in and around Central London, and is particularly interested in Mews houses. She enquired about the range of Mews properties that are currently available, and mentioned how she finds it fascinating that so many streets within the Marylebone area include ‘Mews' in their street names. She continued to ask me whether the Mews houses encompassed within the wide array of Mews streets were currently performing well and how their investment outlook is currently being portrayed. I found her reasoning very interesting and replied that I would certainly inspect some of these Mews streets in greater depth for her, and return with a thorough analysis regarding the investment potential of the Mews houses situated here. However, to begin with, let me divulge some background details regarding Mews streets in Marylebone, which are commonly defined as a street of houses that have been converted from former stables with accommodation, to satisfy modern demand and fulfil a purpose in providing a suitable/practical form of housing for Londoners. In the 18th century, in order to accommodate space for horses, coaches, as well as servants within the grand townhouses that were being built during this period, the solution was to build roads around the rear of these popular and wealthy streets – so that stables could be built. A curious feature of the majority of Marylebone Mews houses is that there are often no windows found at the back of these properties, so that servants who were usually housed here could not observe & spy on their aristocratic masters; there is a lot of cultural identity found in these attractive Mews houses that also helps us understand the origins of London life. Nonetheless, with the emergence of motor cars in the 20th century and less dependability on servants, Mews houses became increasingly unnecessary in their former form and were gradually converted to match modern-day needs; they now make very practical housing types, where residents can use the unique facilities for their vehicles and live above their cars. Much of the charm of a Mews house is that the streets which encompass them are slightly tucked in away from the bustle of Central London life, but close enough to their parent streets to maintain their influence and remain in touch with all of London's business opportunities. These iconic London houses are very important to the Marylebone identity and inhibit the names of over 22 different Mews streets, which offer a wide selection of Mews accommodation – making this type of property investment a key factor to consider, and one which needs a thorough financial exploration to uncover just how valuable investment prospects here could be. I will be conducting an analysis using 5 well-known Mews Streets within Marylebone, where I will be gathering the average values of 2 and 3 bedroom Mews houses that can be found residing here. Furthermore, I will also be comparing the current average rental values, the prospective rental yields, as well as providing an account of the average capital growth rates during the last 10 years.
Analysis of a selection of Mews Streets:
Bryanston Mews West (W1H 2BW)
2 bedroom properties: Average Property Value: £1,620,000 - Average Rental Value: £4,450 (pcm) – Predicted Rental Yield= 3.29% - Average Purchase Price in 2006: £675,000 - Capital Growth over the last 10 years (2006 – 2016) = 88%
3 bedroom properties: Average Property Value: £2,584,333 - Average Rental Value: £6,650 (pcm) – Predicted Rental Yield= 3.08% - Average Purchase Price in 2006: £990,000 - Capital Growth over the last 10 years (2006 – 2016) = 96%
Park Crescent Mews East (W1W 5AG)
2 bedroom properties: Average Property Value: £1,813,250 - Average Rental Value: £5,400 (pcm) – Predicted Rental Yield= 3.57% - Average Purchase Price in 2006: £782,000 - Capital Growth over the last 10 years (2006 – 2016) = 84%
3 bedroom properties: Average Property Value: £2,320,000 - Average Rental Value: £6,850 (pcm) – Predicted Rental Yield= 3.54% - Average Purchase Price in 2006: £910,000 - Capital Growth over the last 10 years (2006 – 2016) = 94%
Devonshire Mews South (W1G 6QR)
2 bedroom properties: Average Property Value: £2,076,856 - Average Rental Value: £5,600 (pcm) – Predicted Rental Yield= 3.23% - Average Purchase Price in 2006: £870,000 - Capital Growth over the last 10 years (2006 – 2016) = 87%
3 bedroom properties: Average Property Value: £2,995,223 - Average Rental Value: £7,700 (pcm) – Predicted Rental Yield= 3.08% - Average Purchase Price in 2006: £1,220,000 - Capital Growth over the last 10 years (2006 – 2016) = 90%
Huntsworth Mews (NW1 6DB)
2 bedroom properties: Average Property Value: £1,447,000 - Average Rental Value: £4,400 (pcm) – Predicted Rental Yield= 3.64% - Average Purchase Price in 2006: £500,000 - Capital Growth over the last 10 years (2006 – 2016) = 105%
3 bedroom properties: Average Property Value: £1,816,350 - Average Rental Value: £5,625 (pcm) – Predicted Rental Yield= 3.71% - Average Purchase Price in 2006: £710,000 - Capital Growth over the last 10 years (2006 – 2016) = 94%
Gloucester Place Mews (W1U 8BF)
2 bedroom properties: Average Property Value: £1,874,500 - Average Rental Value: £5,500 (pcm) – Predicted Rental Yield= 3.52% - Average Purchase Price in 2006: £755,000 - Capital Growth over the last 10 years (2006 – 2016) = 91%
3 bedroom properties: Average Property Value: £2,783,200 - Average Rental Value: £7,700 (pcm) – Predicted Rental Yield= 3.31% - Average Purchase Price in 2006: £995,000 - Capital Growth over the last 10 years (2006 – 2016) = 103%
Inspecting these results further, you will notice that our selection of Mews streets all produce positive investment capabilities, which adhere to at least the typical Marylebone market prices, if not exceeding them. Starting off with the average property values then, we can calculate that 2 bedroom Mews properties (taking our selection of Mews streets as our models) cost in the region of £1,766,321 on average; as for a 3 bedroom Mews house, this figure is greatly exceeded, leaning towards an average of £2,499,821. The highest values achieved for this property type can be found along Devonshire Mews South (W1G) for both 2 and 3 bedroom Mews houses; whereas the lowest prices are located along Huntsworth Mews in the NW1 perimeter. Next up for the rental prices, we can see that the average rental capacity of a 2 bedroom Mews house stands at £5,070 (pcm), and for 3 bedroom properties of the same type, the average rental price circulates around the £6,905 (pcm) mark. With such high rental values, it is understandable why Mews houses in Marylebone provoke such a high interest; the annual income afforded by these prices is spectacular, and would undoubtedly make fabulous investment projects. Divulging further upon the rental capabilities, we can witness an average rental yield of 3.45% for 2 bedroom Mews, which arrives at a slightly lower 3.34% yield for 3 bedroom Mews. Although both 2 as well as 3 bedroom Mews houses show pretty commendable rental yields, 2 bedroom properties minimally edge this field with a 0.11% difference – which can actually be of lucrative difference, especially with the huge finances property investment commonly deals with. I would say that this trend of decline with prospective rental yields (between 2 and 3 bedroom Mews), is often caused by 3 bedroom Mews reaching such a high price sometimes that the achievable rental figures simply cannot compete; causing this to be reflected somewhat in the proportion of achievable annual rental yield. Lastly to discuss the capital growth here, you will be pleased to detect very creditable capital growth rates across both 2 and 3 bedroom Mews properties, with the former achieving a 91% increase on average over the last 10 years, and the latter achieving an even higher average growth of 97.6% during the same time period. 3 bedroom Mews here slightly outperform their 2 bedroom counterparts by a higher growth rate of 6.60% on average, showing that although 2 bedroom properties may have slightly higher rental yields, 3 bedroom Mews make up for this deficit in their capital growth accounts. In overall, I believe that the Marylebone Mews industry can be a very profitable one, with its high rental capabilities and great capital growth rates in particular, potential investors just need to make sure that the initial price is of a suitable nature, so that this can be reflected upon the future investment prospects of the property.
Should you find yourself intrigued by the very interesting Mews house investment scene and desire to find out even more, please get in touch with me and I shall discuss property investment along the main Marylebone Mews streets in even further depth with you.
