Posh restaurants boost property prices by up to 20 per cent

October 9, 2013 | by | 0 Comments

Living next door to a posh restaurant could boost your home’s value by up to 20 per cent, new research revealed.

A study of house prices in London found that the opening of a prestigious eatery can significantly affect house prices in surrounding streets.

Researchers found that a Michelin-starred restaurant boosts the desirability of a neighbourhood while a high concentration of fast food outlets has the opposite affect.

Estate agent Wetherell analysed home values in five of the six districts which comprise the affluent West End – Mayfair, Marylebone, Fitzrovia, Soho and St James’s.

They then compared property values with the number of Michelin-star restaurants, other restaurants and fast food outlets in each of the districts.

The survey found 295 restaurants in the West End area, with 29 boasting prestigious Michelin-stars, 223 others and 43 fast food outlets.

Mayfair, which boasts 20 of the Michelin-star restaurants, has the highest property values in London’s West End, with prices for flats currently averaging £1,953 per sq/ft.

And the iconic W1K postcode, which boasts the Scott’s and Le Gavroche eateries, has seen residential values rocket by 61 per cent over the past six years – 20 per cent above the average growth rate for the W1 district.

Peter Wetherell, boss of Wetherell, said: “There are plenty of examples of how good restaurants have transformed an address and helped resi-values increase dramatically.

“In 2009 there was a big gap in South Audley Street in the form of a neglected office block. Then Richard Caring transformed it into a top restaurant known as 34.

“This has helped to make the flats in No.33, an adjacent apartment building, extremely desirable and property values jumped up 15 per cent after the restaurant opened.

“Similarly, the construction of the Twenty-First building with its flagship Cipriani restaurant transformed Davies Street from a place people passed by into a destination.

“Twelve years ago the penthouse above the restaurant was valued at #1,400 per sq/ft, it has just re-sold for £4,000 per sq/ft.”

The research was carried out by Wetherell and Dataloft, using data from LonRes, Michelin and Square Meal.

West End homes on the doorstep of fast food outlets “underperform” the average growth for the region by up to -15 per cent.

It found Fitzrovia and Soho have the lowest property values in London’s West End, at £1,130 per sq/ft and £1,283 per sq/ft respectively.

These two districts also have the highest number of fast food outlets, with 14 in Fitzrovia and 18 in Soho – making up 75 per cent of the West End’s total.

People living in the West End are generally affluent and hard working but also time poor. As a result they are more likely to eat out at the end of the day.

Mr Wetherell believes the improved quality of restaurants in the area has resulted in Londoners “enjoying a New York and Paris style culture” where many meals are eaten in restaurants or smart cafes.

He added: “None of our clients would dream of living above or next door to a fish and chip shop, but when that fish bar is Scott’s, it’s the complete reverse.

“Likewise, we would never promote the fact a property overlooked a pub or nightclub. However a flat overlooking George or Harry’s Bar is excellent brand association, a good location made even better.

“Whilst there are no fast food outlets in Mayfair, we do have a hamburger bar; its called the Hard Rock Café, and its known around the world for its quality.”

Restaurant tycoon Richard Caring added: “A great restaurant like Scott’s or 34 has the power to make an address famous and turn it into a destination.

“Part of the reason why people choose to live in London’s West End is because of the superb restaurants and private members clubs on their doorsteps, which benefit the local housing market, it’s a win-win for all concerned.”

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