London

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It is estimated that by 2020 a total of 60 million people will pass through London’s King’s Cross Station each year. Those are the same figures seen right now at London’s Heathrow Airport. To accommodate such an influx of people and in order to modernise the whole King’s Cross precinct, plans to makeover the area have been unveiled by media.

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London residential rents are falling hand-in-hand with property prices and landlords have to reduce rents to entice tenants, according to latest reports.

Rents in the capital are now 5% lower than they were in December 2007 and at their lowest since December 2005 and have fallen for the ninth month in a row without showing any signs of abating.

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London was yesterday, the official home of Britain’s largest shopping mall with the launch of the $2.8 billion Westfield London Shopping Centre in Shepherd’s Bush (White City), a massive 265-store, glass-roofed shopping center. The centre’s owners; Westfield and Commerzbank AG are confident that the looming British recession; the worst since 1991 will not negatively affect the potential profits of the centre’s future.

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The American ambassador Robert Tuttle announced a week ago that the US embassy was to relocate to a more secure location. News of this spread quickly as speculation arose whether the current embassy location in swanky Grosvenor Square was to be transformed into luxurious high end apartments once the move was approved by British planning authorities and the US Congress.

London once again defied the skeptics and remained on target for a 17% increase in value in 2007 despite falling prices in much of the rest of the country.

The Royal Institute of Chartered Surveyors reported that “house price growth remained negative for the second month in succession,” and “new instructions declined for the fourth consecutive month at the fastest pace since June.”

Having said that, London was the only region in their monthly survey to experience a rise in instructions, and according to the Financial Times House Price Index, “prices in London rose 1.1 per cent in August compared with July and the annual rate of growth accelerated to 17.6 per cent, from 17 per cent in July. This was almost double the pace of growth of the south-east, the area with the second-highest increases, where prices were up by 9.4 per cent over the year. The cost of the average home in the capital is £363,364, compared with the national average of £225,826.”

The FT index suggests that overseas demand, rising immigration and City bonuses are fueling the London price increases.

Some areas around the country were less fortunate with price drops reported in the North, East Midlands and Yorkshire & Humberside and stagnant prices in the North West, South West and East Anglia.

Whether or not London can maintain this continued growth in the face of credit squeezes, reduced mortgage lending and dropping prices in much of the rest of the country remains to be seen and many analysts are predicting a slow down or reversal before the end of the year. For the moment though, it looks as though London is shoring up the whole market.

Links:

The Financial Times

The Royal Institute of Chartered Surveyors

The Halifax House Price Index

The Land Registry House Price Index

It could be the stuff of World War III: Arabs, Americans and Russians trying to outfox each other and seize control of valuable land. A new terror crisis? A stormy session of the United Nations? No: this is a typical scene from central London’s super-wealthy and overheated housing market, where the rich and famous compete for the rarest of commodities – a perfect property in a prime location.

The whole of the London property market may be hot at the moment, with the average asking price nearly £379,000, according to property website Rightmove, but central west London – from Kensington and Holland Park in the west, through Bayswater to the north of Hyde Park, past the mews of Mayfair and Knightsbridge and down to Belgravia and Chelsea in the south – is at melting point.

According to Rightmove, in Kensington and Chelsea average property prices have soared by £120,000 to £1,329,878 in the past month and by £620,000 in a year.
There are two reasons for this extraordinary increase: the first is pure economics: there are far more wealthy buyers than there are homes for sale. The second is status: when the world’s wealthiest buyers want to add another prestigious address to their real estate portfolio, they look to Pimlico rather than Paris, to Marylebone instead of Manhattan.

‘London has what the world’s richest people want – security,’ says Charles Peerless of Winkworth estate agents. ‘It speaks the new universal language of English, has an easy air hub at Heathrow, good schools, a welcoming tax regime for foreign owners, and the world’s financial capital in the City.’

In the past year Peerless has visited Singapore, Dubai, the US and (three times) Shanghai, to explain London’s property market to wealthy would-be buyers.

‘The number of high net-worth individuals (HNWIs) is expanding more rapidly in North America than in Europe for the first time since 2001, while Singapore, South Africa, Hong Kong, India and Australia have seen the highest growth in HNWI numbers,’ explains Liam Bailey of Knight Frank, an estate agent that at any one time has about 300 of London’s most expensive homes on its sales books.

It’s better to value homes by floor space than the number of rooms, says Paula Hawkins

IN A NATION as obsessed with house prices as our own, there can be few homeowners who do not have at least a vague idea of what their property is worth. If asked to put a value on our homes per square foot, however, many of us would not have a clue. But pricing per square foot or per square metre is the standard in most other markets, and as more foreign buyers come to the UK it is becoming more common to think about property values in terms of floor space rather than the number of rooms.

“When you buy a property at the top end of the market say a flat in Sloane Square  you will usually see the size of the property quoted in square feet,” says Joe Martin, of the Royal Institution of Chartered Surveyors (RICS). But what you do not see is the price per square foot. “It has always bemused me: why we do not value property per square foot the way that everyone else does,” Martin says. “We have this fixation with the number of bedrooms, which I believe has had an adverse effect on the property market. It has led to us building smaller houses with lots of small rooms.”

Moreover, rooms in private homes are the smallest of all. “It is one of the quirks of history that social housing is generally bigger than private housing, because there are minimum standards for the size of rooms in social housing,” Martin says. The Parker Morris Standards, which were introduced for all council housing in 1969, state that there should be at least 33 sq m for the first occupant of a house, and an average 13 sq m for each additional person.

No such standards apply to private housing, however, which has meant that the rooms in our houses have been getting smaller and more numerous. According to RICS data, a typical house built today is 55 per cent smaller than one built before 1920. House size has not changed a great deal since the 1980s, but the number of rooms we squeeze into our homes is rising, due to the popularity of en suite bathrooms, utility rooms and home offices.

When you do take a look at the price of property per square foot, it becomes clear just how expensive UK housing is. The estate agent CBRE Hamptons International has found that, per square foot, Central London is the most expensive place in the world to buy a home. The CBRE Hamptons report shows that prime residential property in London costs about £1,200 a square foot, 20 per cent higher than the cost of property in New York. For “super-prime” properties, prices range from about £2,000 a square foot to a staggering £3,000 a square foot at the very top; this was the actual price achieved for an apartment sold recently in Chelsea Square.

Pricing per square foot allows international buyers a clear view of what they can get for their money. For example, while London’s average price is £1,200 and New York’s is £1,000, Tokyo property costs £900, Hong Kong £700 and Dubai property just £200 a square foot.

Maximum super-prime prices are, of course, much higher, with only Monte Carlo, at £2,800 a square foot, coming close to London prices.

There is obviously more to purchasing a property than price per square foot. Andrew Jones, a partner at the estate agent Knight Frank, says: “People want very different things from different cities. Each international centre has its own attributes, so a straight price per square foot comparison may not be that helpful.”

However, while there are plenty of other factors to consider when looking at properties to purchase, this should at least be one. Since most estate agents will now put the area of a property in square feet on the floor plan when marketing a home, you can do your own calculations to find whether you are getting good value. A higher overall price may be worth paying: for example, take two three-bedroom properties in London SW4 (Clapham). The smaller flat, which costs £275,000, has a total area of 649 sq ft, while the larger three-bedroom home near by costs £375,000 but has a total area of 1,082 sq ft. Measured in terms of space, the larger property is cheaper, costing £346 a square foot, while the smaller property costs £423 a square foot.

JOIN THE WORLD OF SPACE INVADERS

COMPARISONS may well be odious, but there’s no doubt that the world of property is increasingly obsessed with them. Everything that takes off in America comes to the UK eventually think super-size fridges and pre-nuptial agreements so we had better get used to square foot comparisons when we buy our homes.

Prices being quoted per square foot really started with new-build blocks of flats, but in a burgeoning property market this trend has now spread to homes of all kinds. The South East, as you might expect, has the highest values, with residential property in Central London the clear leader at £1,200 per square foot.

Guildford, voted one of the best places to live in Britain in a recent Channel 4 programme, is a far more affordable £249. Cambridge, boosted by an affluent educated elite and wealthy silicon-valley market, comes in close behind at £240, while Brighton, bolstered by its Soho-by-Sea reputation and its celebrity residents, follows closely with prices of £232 per square foot.

Rather surprisingly, homes in Lincoln are fetching an average £190 per square foot, ahead of Birmingham at £152, where smart flats in the old jewellery quarter have proved popular with young and well-off singletons. York probably counts as something of a bargain at £182, as does Bristol at £164 and Leeds at £147.

Bottom of the league, but top of the table for bargains, is Manchester, where prices are a very manageable £137 per square foot.

Source: Timesonline

Related:

London has officially overtaken New York as the world’s most expensive residential market, a top global property agency said in a report on Thursday.

“Our research suggests prices currently achieved in the prime areas of Central London are the highest in the world when measured by price per square foot (sq ft),” said CBRE Hamptons International, part of CB Richard Ellis Group Inc (CBG.N: Quote, Profile, Research), one of the world’s largest property services firms.CBRE said prime residential property in London on average cost around 1,200 pounds ($2,280) per sq ft compared with 1,000 pounds per sq ft in New York.

The pricing differential largely reflected the continued buoyancy in the London market, which was in sharp contrast to the slowing U.S. market, CBRE said.

Tokyo was the third most expensive residential market at around 900 pounds per sq ft.The report said London’s West End also beat Manhattan at the very top — or super-prime — end of the market.

It cited apartments at The Plaza and a triplex penthouse in the Pierre Hotel in New York that were on the market for between 2,700 and 2,800 pounds per sq ft, while an apartment in London’s Belgravia had set a record for a new development above 2,800 pounds per sq ft and a second-hand property in Chelsea had sold for more than 3,000 pounds per sq ft.In Europe, only Monte Carlo had kept pace with prices in London and New York, CBRE said, citing a recently completed sale at Le Park Palace for 2,840 pounds per sq ft.

Source: Reuters