Millionaires Try To Avoid Homelessness In London
June 4th, 2007
London, the third most expensive city in the world, is the newest battleground for rich buyers from the Middle East, Russia and the US. The fight for luxury properties has reached such epic proportions that economists are calling it the "Third World War".
The average London home costs £325,000 but this jumps to over £1 million in the city's most fashionable areas, including Knightsbridge and Belgravia - both of which are set to be conquered by the richest people in the world.
Estate agents Rightmove said the summer investment rush has already pushed the price of high-end flats in Kensington and Chelsea up to £1.4 million, a £120,000 increase from last month. City bonuses and rapidly growing Asian economies contribute heavily to the trend.
Property specialists also too many rich people are overbidding for too few luxury flats in central London.
Liam Bailey, an agent with Knight Frank, predicted that the price of luxury real estate in the UK will continue to outpace the mainstream market. Although Britons now comprise 40 per cent of London's luxury market, this will decrease in future.
"We could see double the growth of the national average," he said, "but alongside this, rich British proprietors are selling their city properties and moving to the countryside."
Even in a strong sellers's market, not enough property is on the market to keep buyers happy - at least for what they're prepared to pay. Mark Anson, the American tycoon recently recruited as Hermes' CEO, said he had been outbid on several homes in central London.
A study by Knight Frank proved that London property market is at the top of the world ladder. London prices have risen 232 per cent in the last decade, while the rest of the UK has risen 185 per cent.
One Hyde Park is a prime example. Developed in part by funds from Qatar's prime minister, the 84 flats are expected to sell for £80 million. Each.
Charles Peerless, of Winkworth estate agents, said London is an ideal location for millionaires from around the world.
"London provides everything the rich want," he said.
"London is secure and uses English, the first global language. It has the busiest airport in the world, the best schools, the most important stock exchange and a reasonable taxing system that attracts foreign investors."
