_KF Insight: The ‘Chiltern Firehouse effect’ on Marylebone more subtle than initially thought

Marylebone has been the subject of much discussion as the location has matured as a residential address over the last decade. Initially kick-started by the proactivity of the Howard de Walden Estate, who recognised that the renaissance of the High Street could have a profound impact upon the area’s perception and as a corollary its economic vitality, Marylebone is now recognised for its high-quality amenities. Its boutiques and restaurants are first-class and at its epicentre is the Chiltern Firehouse, as Christian Lock-Necrews tells Tom Bill.

February 20, 2018

The impact of the Chiltern Firehouse on the Marylebone property market has been more subtle than its high-profile opening four years ago suggested, according to Knight Frank’s Marylebone office head Christian Lock-Necrews.

While media coverage of Marylebone initially surged due to the hotel and restaurant’s world-famous clients, its impact on demand for residential property has been relatively delayed and should be seen in the context of a wider renaissance programme that began with a revamped High Street.

“There was a lot of talk about the ‘Chiltern Firehouse effect’ on the residential market in Marylebone but it has been more of a slow burn,” said Christian. “We have buyers who have been coming to the Firehouse for years and now want to buy in Marylebone because they’ve fallen in love with the area.”

^{Above: Christian Lock-Necrews talks to Tom Bill}

The Chiltern Firehouse is located on Chiltern Street, the redevelopment of which has been led by the Portman Estate. It was the first London opening for hotelier Andre Balazs, who has a portfolio of well-known luxury hotels in the US. It is one of the most high-profile elements in the wider transformation of Marylebone, a consumer-led process of gentrification that began with the location of independent artisan brands on the High Street.

This has underpinned the performance of the area’s residential property market.

Average prices in Marylebone rose 5.5% in the year to January 2018, according to Knight Frank data. This was the highest growth recorded in any area across prime central London (PCL). Indeed, average prices in PCL fell by 0.7% over the same period.

Furthermore, the total value of transactions in Marylebone grew 23% in 2017 compared to 2016, which was the highest rise for an area located in the London boroughs of Westminster or Kensington & Chelsea, LonRes data shows.

In an indication of how the area has transformed in recent years, the maximum achieved price per square foot in Marylebone was £5,530 in 2017 compared to £3,510 in 2013.

The principal landowners - the Portman Estate and the Howard de Walden Estate - have undertaken substantial redevelopment programmes in Marylebone and a series of high-quality new-build residential developments has also driven demand. This has been underpinned the relative value of Marylebone compared to neighbouring areas.

The increased levels of activity in Marylebone is in contrast to many other areas of the prime market and underlines the current fragmented nature of the residential market in central London.

Prices and transactions in prime central London as a whole have slowed following a succession of tax changes in recent years. While trading volumes are stabilising and price growth appears to be bottoming out, some markets are entering recovery mode at a faster rate than others. In the year to January 2018, 45% of Knight Frank offices in PCL registered a rise while 55% recorded a decline.

“What’s happening in Marylebone proves you can’t tar the whole of prime central London with the same brush,” said Christian. “But locally, beyond the Chiltern Firehouse, schools in Marylebone continue to improve and we will see some further positive impact after the opening of Crossrail.”

Christian Lock-Necrews is head of Knight Frank's Marylebone office. The Marylebone sales team is on hand to help with any query related to buying or selling property in the area.

Contact the Marylebone office