Many of the world's richest are immune to the recent financial turmoil, and they continue to bid up property in London's super-prime sector
While most of Britain copes with the worst property market slump since the early '90s, London's super-prime residential sector continues to enjoy boom times.
According to the Halifax house price index, British property prices fell 12.7 per cent over the 12 months to August - the biggest year-on-year fall since 1931. Yet figures from estate agency Knight Frank show that prices for Central London homes, valued at GBP10 million (HK$136 million) or more, rose 19 per cent over the same period.
The country's mainstream housing market has been badly squeezed by the credit crunch. Mortgages are harder to get and more costly than a year ago, and the higher cost of living caused by rising prices for petrol and other goods has reduced buyers' purchasing power and levels of confidence.
But buyers of super-prime homes are wealthy enough not to need mortgages. What's more, many of them have benefited from the credit crunch and commodities boom. Their ranks include hedge fund managers, who bet successfully on falling share values, oilmen and coal mine owners, and their accountants and lawyers, and the other businessmen with whom they trade. More than half come from overseas, particularly Russia and the Middle East.
Liam Bailey, head of residential research at Knight Frank, says that the super-prime sector is 'immune' to the downturn affecting the rest of the market and that the gap in values between the top and bottom ends of the housing market is widening. 'It is clear that the buyers of such homes have been relatively unaffected by the credit crunch,' he says.