Written by Lucy Denyer, for The Sunday Times on July 29th 2012
Overseas buyers are pushing London prices sky high - we look at the top new properties that are likely to sell for extraordinary amounts.
From Usain Bolt to Victoria Pendleton, the world’s finest athletes are bidding to win gold and set new standards at London 2012. Yet it’s not just the Olympics where records are expected to be broken — prime property prices in the capital have been soaring, bolstered by an influx of international wealth, and homes are being marketed at the highest ever price per square foot.
Take the penthouse flat in the Bulgari Hotel, Knightsbridge. Details of the designer residential development have been kept firmly under wraps, but estate agents say the penthouse recently sold for close to £8,000 per sq ft. To put that into perspective, the average price per sq ft in London is £941, according to Lonres, the online database that tracks all sales in the capital. The Halifax reports that the national average for England and Wales is £158.
It’s a similar story throughout prime central London. At One Hyde Park, the Knightsbridge development aimed at oligarchs and Middle Eastern oil barons, and overseen by the Candy brothers, a penthouse sold for £7,250 per sq ft last November. The previous record was £6,000 per sq ft, at the same development when it was launched in 2010.
“If a place offers the discretion and service that the super-rich want, I can see some people paying up to 40% more,” says Robert Bailey, a top-end buying agent. He adds that the record will be broken not by wealthy homegrown buyers, but by overseas purchasers.
Savills estate agency predicts that the annual supply of new residential properties selling for more than £5m is set to more than double to 100 sales in 2014. Last year, there were twice as many transactions in this market as in 2006. Forthcoming launches include the Shard, at London Bridge, where penthouses are expected to cost £5,000 per sq ft; Glebe Place, a development of houses and flats in Chelsea; De Vere Gardens, in Kensington; and Trafalgar One, the first residential project on the landmark square.
For individual houses, the price per sq ft is almost always lower than for luxury flats. Most high-end London sales tend to hover around £2,000-£3,000 per sq ft, bar a few exceptions: the most notable is the house on Kensington Palace Gardens that Lakshmi Mittal, the steel tycoon and the man behind the Orbit Tower in the Olympic Park, bought in 2008 for £117m — or a world-record £8,500 per sq ft.
Of the house sales coming up in the autumn, one of the most anticipated is the latest project from the developer Mike Spink in Knightsbridge. Last year, he sold the most expensive country house on record, for £119m. Now he has finished knocking together two houses in Cottage Place, off Brompton Road, and he will be selling them privately in September.
Knight Frank, the instructed agent, says a valuation has not been carried out, but experts suggest that the house could sell for more than £6,000 per sq ft. The mansion will be perfect for the “international high-end buyer, because of its location, use of space and high spec,” says Charles McDowell, a local agent. But will it have what it takes to make the property podium?
Not everyone who is in London for the Games is there just to watch sport. One group of visitors has another competitive endeavour in mind: shopping for property.
“We have seen a number of international clients with Olympic tickets who are tagging a property search onto their trip,” says Charlie Bubear, director at Savills’ Chelsea office. He has already agreed three sales to buyers in London for the Games. As ever with the overseas market, this is mostly big-bucks stuff; his clients have between £1.3m and £3m to spend.
Karelia Scott-Daniels, managing director at Manse & Garret Property Search, has already organised several tours for visitors keen to invest while they are here. They range from an Indian buyer with £30m to splash out on a portfolio of flats to an American couple able to spend up to £4m and looking for a family home.