Is London the New Monte Carlo? Property Prices Say Yes!

by : Adam Singleton

A recent study published by the Daily Telegraph reveals that London property prices are rising at the fastest rate for more than 30 years, with many properties fetching more money per square foot than properties Monte Carlo. The study by estate agency Knight Frank provides further evidence of an ever growing gap in the UK property market, where prices have slowed down across the UK, but continue to rise in London.

The monthly report, which specialises in properties with an average cost of ?5million, has revealed that in recent months some properties have fetched ?4000 per square foot of property. This figure means that a walk-in wardrobe in some parts of Belgravia actually costs more per square foot than most three-bedroom houses in Scotland and the north of England. In comparison, properties in Monaco are reckoned to be worth ?2190 per square foot of property, while other locations - such as New York, Hong Kong and Tokyo - peak at around ?1600 per square foot. Furthermore, the report shows that these top-end homes have increased in value by a third in the last 12 months.

The rate of growth in the London property market is the fastest rate seen since March 1979 and means that homeowners in affluent areas of the city, such as Knightsbridge, Chelsea or Hampstead, are earning more than ?4000 per day from their property alone. These areas and their properties are prime targets for high-profile businessmen, sports personalities and stars of the silver screen.
Yolande Barnes, the head of research at Savills, said:
"These are big international players, who are after trophy assets. A London property is part of their global portfolio, just as much as Chinese modern art or Indian jewellery."

In May, a house in Belgravia sold for a colossal ?30 million, although that in itself pales into comparison when pitched against a house reckoned to be worth ?100 million - a 12 bedroom mansion in the city's Kensington Palace Gardens that's owned by steel tycoon, Lakshmi Mittal. However, Knight Frank believes that the London property market is about to peak, and anticipates that the price boom will slow down before gathering pace again towards the end of the year.

When the company began its monthly survey in 1976, a London property valued at ?100,000 would now be worth around ?4.2 million. However, some experts have voiced concerns about the distorted property market, where London and the south of England have shown rapid growth compared to a much more modest growth in Scotland and the north-east, with the average London property commanding in the region of ?350,000 compared to ?138,000 in Scotland and ?129,000 in the North East of England.