Billionaires cool toward London property as rich-bashing escalates
By Tom Bill and Chris Vellacott ,Reuters
October 6, 2012, 12:10 am TWN
LONDON -- The love affair between the global super-rich and London property is souring as UK politicians tap into a mood of public resentment of the wealthy, with tax increases and rhetoric playing up their own humble origins.
Prices of homes costing more than 10 million pounds (US$16 million) have risen 56 percent since 2007 as overseas investors park money in the relative safety of London bricks and mortar, with foreign buyers accounting for about a two thirds of deals, a report by property consultant Knight Frank shows.
Prices in top neighborhoods, such as Mayfair and Kensington, will be flat next year after a slowdown that began in March with a coalition government budget that included a proposed “mansion tax,” Knight Frank said on Friday.
Alex Michelin, founding partner of luxury developer Finchatton, said: “A 3.5-million-pound house in Chelsea was put on sale in March, but interest cooled rapidly after the budget. It was like the buyers disappeared into quicksand.”
Last month's sale of a property called Gordon House to developers the Candy Brothers was a key test of appetite because of the high asking price of 75 million pounds. It was bought for closer to 65 million, three sources told Reuters.
Personal wealth is a divisive issue in British politics, with Conservative Prime Minister David Cameron frequently under attack for his privileged upbringing, while many in the country suffer under austerity measures. Cameron is the latest in a long line of British prime ministers to have attended Eton, one of the UK's top fee-paying schools.
Ed Miliband, leader of the opposition Labour Party, featured in a political broadcast on Tuesday that emphasized his state-school background, despite subsequent reports that his Primrose Hill home is worth 1.6 million pounds.