London overtakes Manhattan for expensive luxury housing

1st September 2006

Luxurious homes in the Kensington and Chelsea area of London.

It is something anyone trying to get a foot on the property ladder has long suspected.

Now it's official. London has overtaken New York as the world's most expensive luxury housing market.

Park Avenue and Madison Avenue may be home to the well-heeled of Manhattan, but they have got nothing on the likes of London's Sloane Square and Kensington Palace Gardens.

If you are a buyer on the look out for a luxury home in the capital it will now cost more per foot than some of the most exclusive addresses in Tokyo, Hong Kong, and Singapore.

Even snapping up a penthouse in the millionaire's playground of Monte Carlo is cheaper than finding a prime property in London.

With an already established reputation as the world's leading international haven for billionaires, it should perhaps come as no surprise that homes in the so-called prime and 'super-prime' market have soared in value.

According to global property firm CB Richard Ellis Hamptons International buying a prime residential property in London's Chelsea costs on average 1,200 per sq ft compared with a more modest 1,000 per sq ft in Manhattan.

In the even more luxurious super prime market the maximum paid was 3,000 per sq ft in London, compared to 2,700 in New York and 2,800 in Monte Carlo.

The report found that apartments at a new luxury development Chesham Place - near London's Sloane Square, had set the record for a new build with a price of more than 2,800 per sq ft. The work of Candy & Candy, and designed by Foster & Partners, the development is made up of six flats, costing up to 24 million, on the site of a former BT telephone exchange.

Nick Candy, of Candy & Candy, said the market for exclusive homes operated freely of the rest of the property market.

"The prime residential market works in its own 'micro climate', where demand remains high for quality, prime residences and strong prices per sq ft are continually achieved for the right property," he said.

"This market, which is truly international, flows free from the base market."

The difference in price reflects the booming London property market, compared to a slowing market in the U.S, and the strengthening of the pound against he dollar. And according to Jennet Siebrits, head of residential research at the firm, the trend is set to continue.

Earlier this year Land Registry figures revealed that the luxury housing market was booming with homes worth more than 2 million selling at the rate of two a day. It is the fastest growing of all the price bands monitored by the Land Registry.

The boom has been fuelled by foreigners, particularly Americans, Russians and Asians, who either want to live in Britain or are looking to own a second, third or even fourth home here.

The largest number of 2million homes are in the London borough of Kensington and Chelsea, where steel billionaire Lakshmi Mittal set a record when he paid 70 million for a home in 2004.

Between January and March this year 170 people paid 1 million or more for a home in the borough, and 56 paid 2 million or more. A detached home in Kensington and Chelsea costs an average of 3.5million.