Top properties in the best areas of London are likely to reach £10,000 a square foot within the next few years, according to Knight Frank, the high-end UK property agent.
Speaking at the release of Knight Frank’s The Wealth Report, Liam Bailey, head of research at the property group, said that top properties in London are approaching £10,000 a square foot.
He said: “Given that top properties were selling for around £1,000 a square foot around a decade ago and that those same properties could now achieve £6,000 a square foot, it’s entirely possible that we will see levels approaching £10,000 soon.”
This would mean that a 1,000 square foot apartment in an area like Knightsbridge, one of London’s most expensive residential property neighbourhoods, could sell for an incredible £10 million in the next few years. Bailey said that London was seeing an unprecedented level of interest from foreign buyers, particularly since the outbreak of unrest in the Middle East.
“Although prime London property took a hit during the financial crisis, prices have since rebounded and are actually higher today than they were at their peak before the crisis,” he said. “London is viewed by many buyers as a safe haven.”
According to Knight Frank, around 50% of the buyers for prime property – those that sell for more than £2 million – are foreigners. A much higher percentage than other top property markets in cities like New York and Paris.
Bailey said this is why top residential property prices in London have rebounded much faster than in New York.
However, Charles McDowell, a property finder for the wealthiest buyers in London, cautioned about getting too over excited about the current property boom in the capital. He said: “Although prices are high and have in some cases returned to their pre-financial crisis levels, vendors are often not able to achieve the prices they had hoped.”
He added: “There is still not the transactional craziness we were seeing back in 2007.”
Despite the boom in prime property in the UK capital, London was still only the second most expensive residential location in the world, beaten by Monaco, according to The Wealth Report.
The Knight Frank report also emphasised the importance of property as an investment, saying that on average, property accounts for 35% of the investment portfolios of the ultra-high net worth.