Located at the centre of London, Chelsea and Earl’s Court are sought-after residential markets where some of the capital’s most prestigious addresses are located. Living here offers a lifestyle that is hard to replicate in other central London locations. Blending the mature and established Chelsea to the more emerging Earl’s Court creates a dynamic combination that appeals to a young profile of buyers and tenants. The area’s attractive housing stock includes desirable red-brick terraces, lateral apartments and quaint mews houses alongside many garden squares.

Young professionals and families have long been drawn to living in both Chelsea and Earl’s Court. Good transport links to a number of key employment hubs, particularly the West End, and many high profile amenities add to the area’s appeal. Chelsea is home to the King’s Road, arguably London’s most famous shopping street, and hosts the world famous Chelsea Flower Show. Earl’s Court has many art galleries and restaurants and is appealingly situated close to High Street Kensington and Holland Park.

Both areas continue to evolve and have attracted investment for new housing developments and infrastructure improvements, such as Crossrail 2. Earl’s Court in particular is seeing the biggest changes with high profile developments further establishing the area as a prime destination.

^{Source: Savills Research using Land Registry}

Property Prices

Chelsea and Earl’s Court are attractive markets for those seeking a prime central London address offering relative value to surrounding areas. The average sale price in the 12 months to July 2016 for property in Chelsea was £1.77m and £1.03m in Earl’s Court, according to Land Registry. The average sale price in Earl’s Court is -46% below the borough average of £1.91m presenting an appealing buying opportunity.

Compared to neighbouring areas such as Belgravia where the average price per square foot for prime second hand property is £2,200, Chelsea and Earl’s Court are less expensive at £1,750 and £1,400 respectively.

The prime London market has faced a number of headwinds over recent years which has resulted in prices falling across all prime areas and in particular for the most expensive properties. The stamp duty reforms introduced in late 2014 had a big impact on high value markets as the tax burden increased. Alongside this, the introduction of a new stamp duty surcharge for additional homes in April 2016 and the uncertainty surrounding Britain leaving the EU has led to a more subdued market.

The effect these factors have had on house price growth in prime Chelsea and Earl’s Court is evident. Average prices have fallen -6.8% and -8.5% respectively over the year to September 2016 and both are now around -13% below where they were in September 2014, prior to the stamp duty changes introduced in the Autumn Statement.

^{Source: Savills Research / *Per week}

Rental Market

The rental market is particularly high value in Chelsea and Earl’s Court. The median monthly rent is £2,900 in Chelsea and £2,200 in Earl’s Court according to Rightmove data. Rents range from an average of £1,700 per month for a one bedroom property to over £14,000 for a five bedroom property.

Although rental prices are high, both locations offer relative value for money when compared to neighbouring areas which has driven, and will continue to drive, demand amongst working professionals and families. Properties that are classified as ‘immaculate’ command a premium.

Prime renters in Chelsea and Earl’s Court will on average pay 36% more for a perfectly presented property as opposed to one whose condition is classified as ‘poor’.

There is currently a large amount of stock on the market in Chelsea and Earl’s Court, according to Savills data. Year to date, stock levels are 33% higher than the same period last year which has resulted in prime rents falling -5.3% over the past 12 months.

Demand

In the prime markets of Chelsea and Earl’s Court, international residents are an important source of demand. Between 2014 and 2016, 54% of buyers and 66% of renters have come from overseas, with those from Western Europe being the most prominent nationality in second hand property. The areas have an established community feel, with around half of buyers purchasing a main residence. Many families choose to settle here for the good schooling on offer. The numerous highly rated nurseries, primary schools and colleges, including the nearby Lycée Français Charles de Gaulle in South Kensington, are a major draw for both domestic and overseas buyers.

According to Savills data, around 75% of tenants renting in the area over the past two years were aged under 40, with the majority of these tenants choosing to rent for lifestyle reasons. This trend is not as evident in other prime central London locations as they often don’t have the same dynamic mix of culture, connectivity and amenities that Chelsea and Earl’s Court have.

^{▲ Chelsea and Earl’s Court boast some of the capital’s most prestigious addresses}