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Once upon a time, owners of homes in Mayfair actually lived in them. You can tell this from the abundance of blue plaques stuck to the front of the houses, commemorating famous residents.
A crowd on a walking tour clusters around 6 Chesterfield Street, where a plaque celebrates former resident Somerset Maugham, playwright and novelist. Next door, 1950s prime minister Anthony Eden spent time, as did dandy Beau Brummell more than a century before him. In blue plaque blackjack, this must count as a full house.
Otherwise, “the Village”, as Mayfair is known colloquially, is deserted. If Mayfair is a village, it must stake a claim to be the world’s most expensive. Possibly its least occupied, too. Agents admit the area is only ever busy in July and August. “Quite a few homes will be occupied for one in every six weeks,” says Mark Parkinson of Middleton Advisors, a local buying agent, as if this is a lot.
You might call this a “buy-to-leave” crisis. Yet with average Mayfair rents topping £50,000 a year for an 800 sq ft, two-bedroom flat, according to data provider LonRes, few will lose any sleep over the victims.
The scarcity of traffic owes something to many residents being abroad. Many of Saudi Arabia’s ruling elite have added a plush Mayfair flat to their global, seldom-visited property portfolios. In a good year, say agents, it might get six weeks’ use.
Saudi royals, and those who surround them, blazed the trail of Middle Eastern buyers in the 1980s, says Trevor Abrahmsohn of Glentree Estates. Wives were drawn by nearby Bond Street’s boutiques, he says; husbands by the healthy crop of local casinos; both enjoyed unwinding at the end of a hard day at The Dorchester, Claridge’s or The Connaught — three of the finest hotels in the neighbourhood, or even the world.
More recently, the financial crisis and the Arab uprising have strengthened the appeal of wealthy London’s heartland. “[The interest] is less about capital growth than capital preservation,” says Parkinson.
Buyers with £6.5m to park, might consider the two-bedroom flat for sale on South Audley Street with Knight Frank. The same agent is selling a five-bedroom mews house on Bruton Place for £7.5m. For anyone with slightly grander tastes, the agent is also selling a smart five-bedroom townhouse on South Street for £19.5m.
Buyers from Qatar have favoured the area for the past six or so years, according to Parkinson. The country’s sovereign wealth fund has joined them. Among its acquisitions was the US embassy in Grosvenor Square in 2009, which it then leased back to the impressively creditworthy tenant. When the Americans move to their new home in Nine Elms next year, the building will be redeveloped as a hotel. Entire blocks of Mayfair are owned by the Qatari fund, agents report, thanks to a network of holding companies.
On the face of it, this institutional buying looks peculiar. Rental yields of 2.6 per cent — the Mayfair average, according to Savills — may look good compared with what banks are paying, thanks to the prospect of negative interest rates, but they are hardly sparkling terms for property investors.
The Qataris don’t seem to mind. Brendon Moss, of Qatari Diar, the fund’s famously reclusive property arm in London, talks about “a 50-year hold period” before the fund will look to sell its Mayfair lots. This contrasts with the “five to 10-year” horizons of rival sovereign investors, he notes, such as the consortium backed by the Malaysian government that is developing Battersea power station.
All this interest has helped shelter Mayfair from prime central London’s recent slowdown. In the seven months to July, prices in the area rose 0.8 per cent, according to Savills, compared with a 1.5 per cent drop across prime central London as a whole.
This has much to do with the savvy stewardship of property estates, says Jonathan Hough of Knight Frank’s Mayfair office. Led by the Grosvenor Estate and the Crown Estate, they have poured money into sprucing up public spaces and attracting top designer brands.
The latter do much of their business in the short summer window when Middle Eastern temperatures soar and Mayfair comes alive. “You don’t take a holiday in August if you own a boutique in Mount Street,” says Parkinson.
On Mount Street, Mayfair’s retail heartland, shops catering for yesteryear’s English gentleman are being replaced by those more attuned to the tastes of the global super-rich. Out have gone Allens of Mayfair, the butcher that had served locals for almost 200 years (including a period on South Audley Street) before closing its doors in October 2015; and gunmaker William & Son, which moved east to Bruton Street in June. In have come Parmigiani (premium watches), Christian Louboutin (shoes) and Marc Jacobs (clothes).
One or two shops are bridging the gap between old and new. Sautter Cigars is still puffing away on Mount Street after more than 50 years. Visit Thomas Goode & Co on South Audley Street, meanwhile, and you will be advised on your tableware purchases by men in morning suits and white gloves. Most shoppers will take this as a sure sign that they have strayed too far south of Oxford Street, but for Riyadh’s summer visitors this is just the ticket.
● Property prices in Mayfair fell 0.5 per cent in the year to October, compared with falls of 5.6 per cent in Knightsbridge and 9.9 per cent in Chelsea
● In Monopoly, buying Mayfair costs £400 — the most expensive property in the board game. In reality the average price of a home in the area is £3.2m
● The area was named after an annual May fair on Shepherd Market, banned from the neighbourhood by residents in 1764
● The Jubilee underground line connects Green Park to Canary Wharf in 13 minutes
What you can buy for . . .
£1.25m A one-bedroom flat in Shepherd Market or Berkeley Square
£5m A three-bedroom period flat on South Audley Street
£12m A large three-bedroom flat in a new development on Albemarle Street
More homes at propertylistings.ft.com
Photographs: Alamy; Ed Reeve