Lack of prime Mayfair houses triggers hotel and lettings boom

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Retail Reporter

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The 1 Mayfair property development (Image courtesy of Lawrie Cornish)
The 1 Mayfair property development (Image courtesy of Lawrie Cornish)

Mayfair’s hotel and lettings sector has scooped up luxury clients left adrift by a lack of prime housing in the area, a new survey has found.

With new planning restrictions and rising construction costs pushing construction to a ten-year low, wealthy visitors have turned to newly built apartments or hotel suites during their stays, according to estate agency Wetherell.

Westminster’s new planning restrictions, which were adopted in 2021 as part of the borough’s 2019-2040 ‘City Plan’, mean that no new residences or properties can be greater than 200 square metres in size, ‘except where it is necessary to protect a heritage asset’.

Westminster Council covers the area from St John’s Wood down to Pimlico, including Hyde Park, Mayfair, Knightsbridge, Belgravia and St James’s.

There are currently just three new luxury Mayfair residential developments under construction – 1 Mayfair, One Carrington and Three Kings Mayfair – providing 65 newly built homes.

With the addition of newly completed 60 Curzon Street, the developments provide just 99 new or pipeline homes, Wetherall found.

This has pushed rents for prime housing in Mayfair up, with an average rent of £90 per sqft in 2024, compared to just £65 per sqft for the rest of prime central London.

The hotel occupancy rate for London’s West End rose eight per cent between 2023 and 2024 to reach almost 80 per cent, whilst the average revenue per available room hit £230, up 12.4 per cent on 2023, according to AND London.

Chairman of Wetherell Peter Wetherall predicted a further increase in lettings values this year as the supply of new homes remains tight.

Over the next three years, just 65 new luxury residences are set to be built in Mayfair, versus 467 new luxury hotel rooms.

Prime London house prices, too, are predicted to grow by 10.8 per cent by 2027 as buyers compete for fewer houses, compared with a national average of 3.8 per cent, according to Beauchamp Estates.