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Prices skyrocket for London luxury homes

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by Elaine Frei

Prices skyrocket for London luxury homes

Competitive bidding and interest from foreign buyers has sent prices for luxury homes in central London up by 31 percent in the year ending in February, according to Knight Frank. It is the biggest growth rate in luxury homes since 1979. 2.4 percent of that growth came in February alone, and the total growth for January and February was 5.6 percent.

Considering the current growth in prices, said Knight Frank’s head of research, their prediction of 12 percent price growth this year could be too low. The areas covered by the data includes Belgravia, Chelsea and Kensington in southwest London, as well as Camden in north London. Currently, the average price for a flat or penthouse is at £1.5 million, while the average house prices is in the neighborhood of £3 million.

The estate agent attributed the growth in luxury house prices to two factors. The first was a record payout of bonuses to City workers, estimated to be around £19 billion. The other, and more prominent, factor is demand from overseas buyers. Of 23 members of the recent billionaires list to make their homes in London, 11 are from abroad. London is attractive to rich foreign home buyers because the UK allows foreign nationals to live in the country while only being taxed on earnings actually made in the UK.

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News posted: March 15, 2007

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