Published February 14, 2007

London prime homes surge at record pace

(LONDON) The price of prime London homes rose at the fastest pace in at least 31 years in January as wealthy European, Indian and Middle Eastern buyers competed for houses and apartments in Belgravia and Knightsbridge.

Prices of houses in central London valued at about £3 million (S$8.9 million) and apartments costing more than £1.5 million rose 3 per cent in January, real estate broker Knight Frank said yesterday. That's the biggest monthly gain since Knight Frank started its prime London property index in 1976. 'It's the bosses rather than highly paid bankers who are leading the way,' Liam Bailey, head of residential research at London-based Knight Frank, said. 'There is no doubt that the key to the price growth seen in Belgravia and Knightsbridge is international demand.'

International business people such as Lakshmi Mittal, chairman of the world's largest steel company; Roman Abramovich, Russia's richest man; and brewing heiress Charlene de Carvalho-Heineken have all bought property here in recent years.

Luxury house prices in Belgravia and Knightsbridge rose 38 per cent in the year to January, while apartments gained 36 per cent in value.

The number of people registered as looking to buy in the three prime districts in southwest London was 37 per cent higher in January than a year earlier while properties for sale hadn't risen so pushing up prices, said Knight Frank.

Sales in the two districts are regularly exceeding US$4,900 a square foot, said Mr Bailey. CB Richard Ellis Hamptons International Ltd said in September that London was the most expensive city in the world for prime real estate.

Prime Manhattan addresses on Fifth Ave, Park Ave and Madison Ave near Central Park cost about US$1,870 a square foot, the company said.

The 330,000 workers in London's main financial district may have earned a record £8.8 billion in bonuses last year according to the city's Centre for Economics and Business Research Ltd.

Prices for prime London properties rose by at least 2 per cent a month in 11 of the last 12 months. - Bloomberg