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London Property Market 01 March 2017

Inside Covent Garden Issue 1

Until it was moved to Nine Elms in 1974, Covent Garden was probably best known for the famous Covent Garden Market that was established in 1670 and at its height was the destination for almost a third of all the fruit and vegetables imported into the country. Following its relocation, the area gradually gentrified and in recent years has seen significant new development. Today, the area is one of the capital's tourist hot-spots – well known for its wide variety of shopping, restaurants and nightlife, most famously the Royal Opera House – but is also a popular residential location.

Within the heart of Covent Garden, property company Capital & Counties acquired most of the buildings around the Piazza in 2006 with the intention of turning Covent Garden into "the best retail and residential district in the capital". Elsewhere, there are a number of new developments springing up which are further transforming the wider area. There are currently 388 new homes being built and a further 464 with planning consent.

Properties in Covent Garden and the surrounding area are overwhelmingly apartments rather than houses, with many handsome mansion blocks, period conversions and an increasing number of luxury new apartments.

As one would expect given its proximity to the West End, the area attracts many people that either work in or support the performing arts, but it is also popular with young professionals working in the City and investors looking to capitalise on the area's growing popularity as a residential location. The cosmopolitan nature of Covent Garden is reflected in the prominence of overseas buyers who come mainly from Europe and South East Asia.

The number of property sales in the area has reduced substantially over the past year, with 29% less transactions in the first nine months of 2016 compared to the corresponding period in 2015. This reduction is explained by a combination of the cumulative impact of higher stamp duty rates, high pricing by vendors and the uncertainty caused by Brexit. There are still many active buyers in the market, but they are highly price sensitive and generally negotiating heavily on asking prices or refusing to view any property which is priced unrealistically.

As in other parts of prime central London, prices in Covent Garden have been falling over much of the past two years and the average sold price reduced by 4.6% in the first nine months of 2016. Despite this, the area has a good long term growth track record and properties held for the last five years will have more than doubled in value while those held for the last 10 years will have tripled in value.