London home prices continue to rocket in the world's most expensive city

[Lucky Luciano]

I live in NYC and it is bloody expensive here. Apartments costing 1600 British Pounds per square foot..London costs 2300 pounds per foot according to the article:

http://www.bloomberg.com/apps/news?pid=20601093&sid=atj8lPYq.RHg&refer=spend

London Luxury-Home Price Increases May Slow, Knight Frank Says

By Simon Packard

June 14 (Bloomberg) -- Luxury home prices in London, the world's most expensive city, may increase at a slower pace this year as more properties come onto a market with fewer buyers, real estate broker Knight Frank LLC said.

The average price of London's costliest houses and apartments probably will climb about 20 percent this year after an almost 29 percent gain in 2006, Knight Frank estimates. That would be the smallest gain since the 8.2 percent advance in 2005.

The number of people who registered with Knight Frank to buy a luxury home in areas including Knightsbridge has dropped 30 percent since March as prices continued to increase, said Liam Bailey, the company's head of residential research, in an interview. In May, prices rose 2.5 percent from the previous month and more than 33 percent from a year earlier, the biggest annual gain since 1979.

`We're turning a corner,'' said Bailey. ``The market's been so incredibly strong that some buyers have sat back to wait and see what happens.''

The prospect of a slowdown follows an 18-month surge driven by bonuses earned by investment bankers, money managers and brokers. An influx of wealthy overseas investors, attracted to London's favorable tax conditions and reputation as a world-class city, have also driven demand.

Price Appreciation

The average price of a luxury house in Knight Frank's monthly index, which draws from seven of London's most expensive districts, is now about 5 million pounds ($9.85 million), with apartments costing 2.5 million pounds. A typical house has appreciated by at least 100,000 pounds, or about four times the average annual U.K. wage, each month since September.

A house worth 100,000 pounds in 1976, when the firm began its survey, would be worth 4.2 million pounds today.

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