Bloomberg News

London Luxury Home Sales Surge to Record on Overseas Buyers

October 14, 2011

(Updates with apartments in seventh paragraph.)

Oct. 14 (Bloomberg) -- Sales of London’s most expensive homes reached a record as foreign buyers dominate the city’s luxury residential market, Savills Plc said.

The number of houses and apartments that sold for more than 5 million pounds ($8 million) rose to 262 from 200 in the nine months through September, 31 percent more than a year earlier, the real-estate broker said today in an e-mailed report.

Overseas buyers make up 65 percent of the market for homes costing more than 5 million pounds, according to the report. The costliest purchases remain concentrated in central London neighborhoods such as Belgravia, Knightsbridge and Mayfair, said Lucian Cook, Savills’s director of residential research.

“Knightsbridge and Belgravia have a high proportion of London’s best-performing flats,” Cook said in the report. “Mayfair has seen significant levels of capital investment and improved amenities which have underpinned price growth.”

International buyers are investing in London homes to protect wealth amid financial or political volatility at home, London-based Savills said. Europe’s sovereign-debt crisis may be worse than the Great Depression, according to Bank of England Governor Mervyn King, and uprisings in countries including Libya, Syria and Egypt have cost a total of $55.84 billion, consultant Geopolicity Inc. said today in a report.

Victorian Building

Buyers from the Middle East, North Africa, Eastern Europe and former Soviet Union are pushing prices in Knightsbridge and Belgravia to new records, Cook said. Values in the west London neighborhoods have risen 93 percent and 94 percent since 2006 compared with 87 percent across prime central London residential real estate.

Four penthouse apartments at the Porchester Building near London’s Paddington Station are expected to sell at 1,200 pounds a square foot, property broker Hamptons International said by e- mail. The six-story Victorian site, which has 41,500 square feet of office space, was put on sale today at 28 million pounds.

Sales of homes above the 5 million-pound threshold totaled 3.2 billion pounds in the nine-month period compared with 2.1 billion pounds a year earlier, Savills said. About 60 percent of the buyers in the last three months were foreign.

--Editors: Jeff St.Onge, Andrew Blackman.

To contact the reporter on this story: Chris Spillane in London at cspillane3@bloomberg.net.

To contact the editor responsible for this story: Andrew Blackman at ablackman@bloomberg.net.


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