June 16 (Bloomberg) -- London Mayor Boris Johnson said high property prices are “the right problem to have” and that technology startups are attracted to the city regardless of its “creaking” infrastructure.
In a Bloomberg Television interview, Johnson said the U.K. capital is Europe’s answer to America, drawing in migrants seeking a better life.
London’s property prices have surged in recent years, boosted by record-low interest rates and cash-rich foreigners seeking a haven from political turmoil. Asking prices in the capital rose 14.5 percent in June from a year earlier to 589,776 pounds ($1 million), more than double the U.K. average value, property website operator Rightmove Plc said today.
“It’s the right problem to have,” Johnson said in a joint interview with former New York Mayor Michael Bloomberg, while acknowledging that the influx of wealthy foreigners made property in London expensive for those already there. “It’s a massive premium here in London.”
Home prices in 17 of London’s 32 boroughs were above the city average this month, according to Rightmove. In four, the average value was more than 1 million pounds. In Kensington and Chelsea, Britain’s most expensive, it was 2.38 million pounds.
Prime Minister David Cameron, the leader of Johnson’s Conservative Party, has pledged to cut immigration, a stance that pits him against those such as Johnson who see inward migration as an engine of growth. Net migration to the U.K. was 212,000 last year, up from 177,000 in 2012, according to official data published last month.
“London is turning culturally and philosophically into the America of the European Union,” Johnson said. “It’s the place where people want to go. It’s the place where people want to be together.” He also said the British need to change their attitude to the rich.
“We have a natural British reserve about accumulating billions,” Johnson said. “There’s nothing sinful or wrong about amassing wealth. The banks and the venture capital people need to be as daring and risk-taking as they can be.”
Johnson said the technology startups he wanted to attract to London weren’t put off by poor facilities. “They love that stuff,” he said. “The older and creakier, the better.”
The mayor said he was proud that London’s immigrant population now matched New York’s. “We have even more languages spoken than New York,” he said. “The original language of London was of course Latin. Pushy Italian immigrants founded our city -- we’re grateful to them.”
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