A large part of the Marylebone success story is its improved retail and leisure offering. This has been created, for the most part, by the two landlords that own the majority of the area, The Portman Estate and Howard De Walden Estate. Howard de Walden are credited with turning the run-down high street into a sought after retail destination by managing a mix of boutiques and small retailers. The Portman Estate similarly created a popular mix of tenants on Chiltern Street, Seymour Place and New Quebec Street.

The residential property in Marylebone mirrors much of prime central London, consisting of Georgian squares and terraces, mews houses and Edwardian and Victorian mansion flats. A large proportion of the terraces have been converted into flats with just 12% of properties in Marylebone remaining as houses.

Fitzrovia

To the east of Portman Place, the district of Fitzrovia consists of smaller, irregular streets with fewer grand squares. The area has historically had a reputation as slightly disreputable, despite being surrounded by more wealthy districts.

However, the perception of Fitzrovia is changing as illustrated by the new restaurants on Charlotte Street. The makeover began with the demolition of the old Middlesex Hospital and Fitzroy Place, a high-end residential development, being built in its place. This helped change the feel of the area but Fitzrovia still offers good value as the price gap with its neighbours remains.

Property prices

Over the past year the average sale price in Marylebone was just over £1.5m, in line with the average across the borough of Westminster, while in Fitzrovia average values were 25% cheaper at £1.1m. Both locations offer a significant discount to neighbouring Mayfair where the average sale price was £3.3m and houses, although few in number, are selling for an average of nearly £10m.

Marylebone in particular has seen strong growth over the past few years. Across all of prime central London, prices have increased by an average of 2.9% over the two years to June 2015. Over the same period, prime property in Marylebone has increased by 13.9%, the highest of any central London district.

^{*24 months to April 2015}
Source: Land Registry   

The rental market

Rental values across both districts are of a similar scale to the sale prices. In Marylebone, the average monthly rent is £2,920 compared to £2,270 in Fitzrovia, a discount of 22% according to Rightmove. However, the rents vary significantly depending on property type and size. In Marylebone, the average rent varies from around £2,000 per month for a 1 bed property to over £10,000 per month for a 4+ bed property.

Demand

The demand for prime property in the area comes from a number of sources. International residents are an important source of demand for the prime housing market across London, accounting for around 38% of buyers over the past 18 months. In the prime markets of Marylebone and Fitzrovia, 52% of buyers were international, ranging from Europeans, Middle Eastern purchasers and a few Americans. However, 2015 has seen a shift towards British buyers who have accounted for 63% of purchasers so far this year. Industry also plays an essential part, reflecting the good transport links to a number of key employment hubs, particularly the West End.

The largest employment industry for people living in Marylebone and Fitzrovia is the Financial and Insurance sector followed by the Professional, Scientific and Tech sector accounting for 20.9% and 18.4% of the employees respectively, according to the 2011 Census.

These are both high value industries but over the next five years Oxford Economics forecasts that while the Financial and Insurance industry will experience minimal growth, employees in the Professional, Scientific and Tech industry will increase by 15.6% to become the largest employment industry in central London.

Marylebone and Fitzrovia already account for a higher proportion of employees in this sector than the Westminster average and so are well placed to draw on the newly created wealth that will result, as Tech buyers in particular, look for alternative locations to live in.

Investors

Investment buyers are particularly attracted to the area due to the large number of tenants living there. According to the 2011 Census, 56.7% and 46.1% of households in Marylebone and Fitzrovia respectively are in the private rented sector, significantly higher than the average across London of 25.1%.

There is a wide range of tenants, including families, couples and many students. In the prime rental market, demand is driven by a strong employment market and an increasing number of international companies in London.

Savills figures show that nearly half of all prime tenants in Marylebone and Fitzrovia are renting due to employment relocation and just 27% are British, with the highest proportion of tenants originating from Western Europe, accounting for 37%.

Source: Savills Research                                                                                                                                                              *Per week