The existing housing stock is benefitting from the development activity as the area receives significant investment with the aim of creating an attractive fringe of the West End, in a way that Shoreditch and Spitalfields have become to the City.

By contrast, very little development is happening in Pimlico. Over the past 12 months, just 5% of sales were new build properties, albeit the highest level since 2010. Pimlico’s housing stock includes a number of garden squares and large four and five storey white stucco fronted terrace houses.

Much of this is architecturally similar to the neighbouring super prime market of Belgravia, though in a more affordable price bracket.

Property prices

Both Westminster and Pimlico offer good value in comparison to the rest of central London. The average sale price over the past year in Westminster and Pimlico (as illustrated in Figure 1) were £1.29m and £950k respectively, 13% and 36% cheaper than across the City of Westminster as a whole. Both locations are significantly better value than the neighbouring district of Belgravia where, despite sitting just across the railway line from Pimlico, the average sale price was £3.3m.

Unsurprisingly, new properties in Westminster trade at a premium as regeneration attracts new types of buyers to the area. Over the past year, the average sale price of new build flats was £1.58m, 43% more expensive than a resale flat.

Source: Land Registry

Rental values

Rental values in Westminster and Pimlico also offer good value. In Westminster, the median monthly rent of £2,300 is slightly lower (3%) than the City of Westminster average and in Pimlico it is 21% below at £1,800 per month, according to Rightmove. Across both locations, the average rent varies from around £1,100 per month for a studio to over £5,000 per month for a 4+ bed property.

Source: Savills Research

Opportunity

Change is underway in Westminster. The area has always had the location and transport links but historically hasn’t provided the same attractive urban environment as neighbouring locations, particularly around the congested train, tube and coach stations. Redevelopment and regeneration are establishing the area as prime, by attracting better shops and restaurants and upmarket businesses and amenities.

We believe this will be a catalyst to progressively unlock the latent value of the housing stock in locations surrounding the redevelopment by attracting demand from increasingly affluent occupiers.