Flat sells for £140m as Bank warns of 'dangerous' bubble
'Major overshoot in prices' could spell disaster as London penthouse sets new house-price record
AN INVESTOR from Eastern Europe has paid £140m – or £10,000 per square foot – for a penthouse flat near Hyde Park, setting a new record for house prices in Britain.
The buyer is "thought to be Russian or Ukrainian", reports The Times, which says the price tag "will be taken as a sign that increasing political rhetoric and taxation of foreign owners is failing to sate the demand of overseas investors".
Penthouse D at One Hyde Park has been sold as an unfitted shell, meaning the buyer is likely to spend millions more on fixtures and fittings. It is one of four penthouses within the block of luxury flats, which is under construction in Knightsbridge.
Charles McDowell, an independent property consultant told The Times that many Russians and Ukrainians are desperate to get their money out of their homelands as unrest there continues.
"The more they can pay for something the better as they just want to get as much of their money into the UK as fast as they can," he said.
The record-breaking deal coincided with a warning issued by Sir Jon Cunliffe, the deputy governor of the Bank of England, that it would be "dangerous to ignore the momentum that has built up in the UK housing market".
Britain risks experiencing a "major overshoot in prices and build-up in debt, followed by a sharp correction with negative equity and an overhang of debt for many households," he said. "This is a movie that has been seen more than once in the UK."
While price rises have been sharpest in London, the Daily Telegraph reports that homes across the country are becoming more expensive.
"House prices grew nationally by 1.2 per cent in April, making prices an average 10.9 per cent higher than a year ago, according to Britain's biggest building society, Nationwide," the paper reported. "Prices are accelerating again after what had appeared to be several months of gradual slowing, with the first double-digit increase for four years."