Cut-rate living space is last resort for skint bankers

THE executives, bankers and traders priced out of London’s fanciest neighbourhoods are getting a new one.

A residential area is rising at the fringes of the famous Square Mile — the City of London financial district — to accommodate those who can no longer compete with the world’s ultrarich for shelter in Mayfair and Knightsbridge.

More than 2 000 apartments are planned or under construction from the Old Street roundabout on the northwestern fringe and along City Road stretching north. In the City itself, 842 units are in the works.

“Knightsbridge is one of the world’s most desirable addresses, so if you want to buy a home there you’ve got to outbid buyers including sovereign-wealth funds and oligarchs,” said Giles Hannah, senior vice-president at Christie’s International Real Estate. “Even those with the most generous financial packages often struggle to do so.”

Russian billionaires and investors from China and the Middle East have driven prices in Mayfair and Knightsbridge as high as £7 000 (R128 000) per square foot.

“The sort of folk that would typically live in London’s West End in the ’90s and ’00s were weighted strongly towards your investment bankers, C-suite and private equity workers,” said Adam Challis, head of residential research at Jones Lang LaSalle. “Wealth is now the determinant of what people can and can’t afford, rather than income stream, so those areas are more weighted towards Middle Eastern oil wealth, the Russian oligarchs and the new money of Asia.”

Home values in London’s priciest districts have climbed more than 60% since 2009, when a cheap pound, record-low interest rates and the city’s history as a financial hub prompted an influx of foreign investors. — Bloomberg