London Mayor Boris Johnson blocked the development of 25 luxury apartments in the city’s Mayfair district because the homes would be too big, signaling a luxury development boom in the city center may face new limits.
The Westminster local government told the developer at a meeting yesterday to redesign the building after Johnson’s Greater London Authority wrote to argue the enormity of some of the apartments would result in fewer homes at a time when the city faces a housing shortage. Westminster Council, which oversees the affluent Mayfair and St. James’s neighborhoods, home to Europe’s biggest concentration of hedge funds, deferred its decision on whether to approve the plan.
The proposal fails to comply with policy guidelines because it “results in a loss of housing due to the applicant choosing to include several exceptionally large units,” the Greater London Authority said in the letter.
Johnson’s intervention could damp a surge in luxury-home building in central London as the city’s reputation as a safe haven attracts increasing investment from overseas buyers. Half of London’s new-home buyers are foreigners and they spent more than 3 billion pounds ($4.6 billion) on new homes in the U.K. capital last year, a 25 percent increase from 2011, broker Jones Lang LaSalle Inc. (JLL) said May 10.
Real estate fund Brockton Capital LLP had sought permission to build homes at 56 Curzon Street with an average size of more than 5,000 square feet (465 square meters) to gain from surging prices. That’s more than five times the size of the average new home in the whole of the U.K., according to the Royal Institution of Chartered Surveyors. Brockton Capital didn’t immediately respond to a request for comment.
A 39 percent rise in Westminster home prices helped fuel a jump of about 11 percent in all of London for the year through March 13, researcher Acadametrics Ltd. said May 10.
Only one in seven foreign buyers of new London homes will live in the property and the remainder plan to rent them out, Chicago-based Jones Lang said in its May 10 report, citing a survey of buyers.
“The building needs to be reconfigured to provide more flats of a size that will attract residents who want to live in them permanently,” Robert Davis, Westminster Council’s deputy leader, said by e-mail. “However, we were impressed with the external design of the proposed building and believed it would make a high-quality addition to the area.”
Westminster City Council has approved similar plans in the past. It allowed the redevelopment of a parking lot on Audley Square into luxury homes in 2008 where the residences would average 6,500 square feet. A comparable development at 20 Grosvenor Square won planning permission in 2011 for units averaging 4,500 square feet.
Billionaire property investors David and Simon Reuben are developing what’s likely to become the U.K.’s most expensive home after winning approval for a plan to convert a former members-only club near London’s Ritz Hotel. Aldersgate Investment Management, owned by the Reubens, were allowed to turn the former In and Out Club at 94 Piccadilly into a single home with about 60,600 square feet of space, Westminster Council decided last month.
The Reubens’ planning application was approved after the two investors offered to contribute 3.85 million pounds to the construction of affordable housing in the borough. Separate applications by the Reubens to convert 95 Piccadilly into a 15,000 square-foot home and turn 90-93 Piccadilly into six apartments and stores were also approved by the council.
“We want to see two things: places being built and secondly we want to see more housing units,” Edward Lister, chief of staff at the Greater London Authority, said in an interview.
London’s annual new housing targets could increase to 40,000 a year from 32,000 a year due to the review of city planning, Lister said by telephone.
To contact the reporter on this story: Patrick Gower in London at email@example.com