Foreigners Seek Haven in London Luxury Homes
Luxury-home prices in central London gained for a 14th consecutive month in December as overseas buyers sought safer investments and competed for a smaller number of properties for sale, Knight Frank LLP said.
Values of houses and apartments costing an average of 3.7 million pounds ($5.7 million) rose by an average of 0.8 percent from a month earlier, the London-based broker said in a report today. Prices are 7 percent higher the previous peak in March 2008.
“Demand for prime London property in 2011, despite uncertainty resulting from the euro-zone debt crisis and ongoing global economic uncertainty, outpaced supply and led to strong price performance,” Liam Bailey, head of residential research, said in the report.
Leaders of countries sharing the euro currency have been struggling to rein in a debt crisis that began with Greece in 2009 and has spread to Italy. The International Monetary Fund will probably cut its forecast for global economic growth as the crisis worsens, Managing Director Christine Lagarde said last week.
London luxury-home values rose 12.1 percent in the year through December, the smallest 12-month gain in three months. Prime central-London prices have risen around 40 percent since the market’s low in March 2009, Knight Frank said. U.K. home prices overall fell 0.9 percent in December to a 30-month low, according to a Jan. 6 report by Halifax, a unit of Lloyds Banking Group Plc. (LLOY)
The number of new instructions to sell in neighborhoods such as Knightsbridge and Belgravia fell 6 percent in the fourth quarter from a year earlier, Knight Frank said. The broker didn’t specify the number of properties for sale.
“Tight supply has remained a feature of the prime central London property market through 2011,” Camilla Dell, founder of London-based Black Brick Property Solutions LLP, said in a separate report. “We see little reason why this might change materially in 2012.”
Black Brick, which advises luxury-home buyers in southeast England, said it helped a client acquire a 7.85 million-pound apartment in The Lancasters development in December.
The Lancasters, a city block of 1850s townhouses overlooking Hyde Park, was developed by Northacre Plc. (NTA)
London has the most people in Europe with a net worth of more than $30 million, according to Wealth-X, a company that works with banks and luxury brands to build a database of people who together hold around $10.7 trillion.
The U.K. capital has 5,955 “ultra wealthy” people, more than twice as many as Paris, which has 2,850, according to a Wealth-X report. Zurich is third with 1,775.
To contact the reporter on this story: Chris Spillane in London at firstname.lastname@example.org.