Few areas in London have such a diverse history as Notting Hill. Over the past 25 years, the area has risen up the rankings to become one of the capital's most exclusive addresses.

Before the expansion of London reached Notting Hill, the area was rural and best known for its potteries and piggeries. Development activity began in the early 19th century, led by the Ladbroke family who were responsible for the street layout, designed to turn the area into a fashionable suburb of the capital. The large houses, available at a discount to more established areas, attracted many affluent buyers.

The area’s appeal began to wane during the 20th century as middle-class households ceased to employ servants and consequently large houses were increasingly split into flats. In the 1950s, many immigrants from the Caribbean settled in the area, establishing the multicultural roots still seen today.

The re-gentrification of Notting Hill began in the 1980s as many wealthy creative families were attracted to the open spaces and stylish architecture combined with the area’s bohemian feel. In 1999, the film Notting Hill saw the profile of the area rise further, and today it is one of the most expensive locations in London.

A huge range of properties can be found in Notting Hill, from the grand white stucco-fronted houses surrounding communal gardens and their associated streets of mews houses, to smaller, colourful terraces. Over time, many houses were converted into flats and now just 15% of the residential property in the area remains as houses.

Property prices

Across the wider Notting Hill area, the average sale price in 2015 was £1.24m, however prices vary significantly. In W11, the core Notting Hill postcode, the average sale price was £1.02m for a flat, increasing to £3.87m for a house. By comparison, in the neighbouring district of North Kensington (W10), the average sale price last year was 54% cheaper than in W11 at £770k, and W2 sits somewhere in the middle at £1.19m.

In the prime markets, the average price per square foot is £1,870 but can vary between £1,300 and £2,600, depending on the location, size and finish of the property.

One factor which can significantly impact property prices is outside space. Within the Notting Hill area, some of the most sought-after addresses have access to one of the 16 communal gardens. Properties with access to these communal gardens cost on average £1,970 per square foot, 11% more than those with a terrace and balcony, and even command a 4% premium over properties with just a private garden.

Over the past 10 years, prime property prices in Notting Hill have behaved in line with the prime central London average. However, prior to that in the early 2000s, price growth significantly outperformed as the area gentrified. Over the five years from 2000, prime prices in Notting Hill increased by 66% compared to an increase of 37% seen across the wider prime central London area.

The rate of price growth has slowed recently and small falls were recorded following the reform of stamp duty in December 2014. However, this follows very strong price growth in the lead up to and since the credit crunch.

^{Source: Savills Research using Land Registry}

Rental market

In Notting Hill, the median monthly rent is £2,630, according to Rightmove. Rental values vary significantly depending on property type and size, ranging from an average of just under £2,000 for a 1-bed property to over £10,000 for a 5+ bed property.

In the prime rental market, the average annual rent per square foot is currently £62, slightly higher than the average for prime central London at £58 per square foot. Properties in immaculate condition can achieve up to £100 per square foot, while properties which are run down or in less desirable locations can achieve just £35 per square foot.

Rental values for prime properties in Notting Hill have been stable over the past five years, increasing just 5% over this period as supply and demand remain well balanced.

Demand

Notting Hill is considered one of the most desirable locations to live in London, attracting the rich and famous from all over the world. Like many other areas in prime central London, just under half the buyers are international, with 20% of all buyers coming from Western Europe.

Unsurprisingly, given the high property prices, 80% of buyers in Notting Hill who already lived in the UK moved from within the boroughs of Kensington and Chelsea or the City of Westminster.

However, unlike some central locations, the majority (two thirds) of purchasers in Notting Hill are buying property to use as their main residence, giving the area a strong community feel.

The demand for rental properties in Notting Hill comes from those who are relocating to the area, either for lifestyle or, more commonly, employment reasons. International tenants account for 70%, with the highest proportion coming from Western Europe and North America.

Access to employment hubs is key for both buyer and tenant demand. Notting Hill already benefits from having excellent transport links, the Central Line in particular takes employees directly to the West End and the City. By late 2018, Crossrail is expected to open and the stop in Paddington will provide even quicker access to employment hubs including Canary Wharf and Heathrow.

^{Source: Savills Research *per week}