Finance time

Luxury-home prices in London rose at the fastest rate in four months as international buyers and a growing number of Britons paid more than 10 million pounds ($19.8 million) for properties, Knight Frank LLC said.

The average price of houses and apartments costing at least 2.5 million pounds rose 1.1 percent in January from December, the London-based real estate broker said in a statement today. That's the biggest increase since September, when prices advanced 1.2 percent. For the year ended Jan. 31, the gain was 26 percent, the smallest since October 2006.

“It is being totally led by the purchase of properties of 10 million pounds or more,'' Liam Bailey, head of residential research at Knight Frank, said in an interview. “The number of deals done at that level in the past three months was double a year ago.''

Tighter lending conditions, falling bonuses in financial firms and a slowing economy are failing to deter the wealthiest buyers, who don't need to borrow to buy homes in London, the world's most expensive location for prime real estate, according to Bailey.

The proportion of wealthy Britons purchasing homes costing more than 10 million pounds has increased to between 40 percent and 50 percent, up from 30 percent a year ago, said Bailey.

Bishops Avenue Purchase

London's most expensive new-built home was sold for 50 million pounds last month to Hourieh Peramaa, a 75-year-old real estate entrepreneur from Kazakhstan, the Sunday Times reported on Jan. 27.

The house on Bishops Avenue in northwest London has nine main bedrooms, 16-bathrooms and five reception rooms and was acquired from Turkish businessman Halis Toprak. Peramaa plans to spend another 30 million pounds extending and redecorating the property, the newspaper said. Bishops Avenue is known as “Billionaires Row.''

Earlier in January, Lev Leviev, an Israeli diamond billionaire, paid 35 million pounds for a house in the same district as Peramaa, according to the Daily Telegraph faxless payday loans.

Indian steel entrepreneur Lakshmi Mittal owns the U.K.'s most expensive home. He paid 57 million pounds in 2004 for a home close to Kensington Palace in central London

Gains in U.K. home values are slowing, increasing at an annualized 4.2 percent, the least in two years, Nationwide Building Society, the U.K.'s fourth-largest mortgage lender, said on Jan. 31.

Bonus Money Declines

Properties at the lower end of Knight Frank's prime index are moving more in line with the U.K. market, said Bailey.

Bonus-earners in the U.K.'s financial industry will invest 2 billion pounds in homes this year, compared with 5.5 billion pounds in 2007, as they look for higher returns, Savills Plc said in November. Savills and Knight Frank are the biggest brokers for prime London properties.

This year, top-quality dwellings in the U.K. capital will appreciate about 3 percent, Knight Frank said today, reiterating a forecast it made in October.

Britain is home to about 68 billionaires, according to the Sunday Times 2007 Rich List. Many are investors from China, India and Russia who have bought homes in London for its schools, stores, theaters and restaurants.

The most expensive houses can fetch as much as 4,000 pounds a square foot, CB Richard Ellis Hamptons International estimates. That compares with about 2,075 pounds a foot in New York, the broker said.

Purchasing at such prices isn't being inhibited by the prospect that the U.K. may impose an annual tax of 30,000 pounds on wealthy individuals who live in the U.K. and keep their residence elsewhere for tax purposes.

“There is a lot of interest in deals being done by super- rich foreign buyers.'' said Bailey.

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