London’s red-hot property market has struck a new record with the sale of a ￡140 million (US$236 million) unfurnished apartment, but even the developer of the opulent building warned that some asking prices in Britain were unsustainable.
Buoyed by the wealth of Russian oligarchs, Chinese tycoons and Arab sheiks, London has become one of the world’s most expensive markets, raising concerns ahead of national elections next year that locals are being squeezed out of the market.
“We’re in boom-time prices, more expensive than we’ve ever been in the history of mankind,” said Nick Candy, one of the developers of London’s One Hyde Park luxury apartments, at the pinnacle of the capital’s super-prime residential sector.
“There is a concern over the market overheating,” he said. “Everyone thinks the main central London is doing so well, [so] the ripple effect is going throughout the UK and some of the prices being achieved are probably unrealistic, and not sustainable.”
However, money is still pouring in, adding to concern about a property bubble in London.
House prices across Britain have not recovered their levels from before the financial crisis struck in 2008, but they are rising at about 10 percent a year, prompting some top policymakers at the Bank of England to sound increasingly concerned about the risks to the broader economy.
A source familiar with the matter said an Eastern European buyer bought a penthouse at the One Hyde Park apartment block for a record ￡140 million.
Candy confirmed that a 1,486m2 penthouse had been sold, but declined to comment on the price or name the buyer.
Developer CPC Group, which is run by his brother, Christian, said the apartment could be worth ￡160 million to ￡175 million when furnished.
Britain’s previous record for an apartment was set three years ago by Ukrainian billionaire Rinat Akhemtov, who paid ￡136 million for a penthouse and apartment at One Hyde Park to knock together into one property.
The wall of money chasing a finite amount of property has sent luxury London prices soaring almost 80 percent since 2009 and while plutocrats’ ostentatious purchases grab the limelight, prices have rocketed even in poorer areas.
Prime central London house prices have risen 79.4 percent since March 2009, against a 40.6 percent increase in Greater London house prices over the same period, according to data from Savills.
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