Hypersonic

That is true lu, but the prices have dramaitacally risen over the past few years.

London Prime Home Prices Have Biggest Gain Since 1979
By Peter Woodifield

Jan. 15 (Bloomberg) -- The prices of London's most expensive homes rose last year at the fastest pace since Margaret Thatcher became prime minister in 1979, as bankers receiving record bonuses competed for a limited supply of properties.

Prices of prime properties in the U.K. capital gained 2.6 percent in December, bringing the increase for the year to 28.6 percent, London-based Knight Frank LLC, an international real- estate broker, said today in a statement. In 1979, prices advanced almost 44 percent.

``Bonus money has already started to impact the market,'' said Liam Bailey, head of residential research at Knight Frank. ``The proportion of prospective purchasers making an offer has increased since November. Much of this demand is due to people wanting to find a property before bonuses are distributed.''

Workers in London's financial district may have earned a record 8.8 billion pounds ($16.8 billion) in bonuses last year, 18 percent more than in 2005, according to the city's Centre for Economics and Business Research Ltd. London house prices rose at the fastest annual pace in at least four years last month, pushing the average asking price to 355,097 pounds, according to Rightmove Plc, the country's biggest property Web site.
The biggest gains in prime properties in December were in Chelsea, an area traditionally favored by bankers, as well as in Kensington, and Belgravia. Prices in those districts rose about 4 percent in the month, Knight Frank said. Belgravia prices jumped 35 percent last year and 34 percent in Chelsea.

Property Shortage
A property in central London that cost 100,000 pounds to buy in 1976, when Knight Frank started its survey, would have been worth almost 3.7 million pounds at the end of December. The same amount invested in the FTSE All-Share Index would have been worth almost 2.1 million pounds at the end of 2006. Consumer prices in Britain have risen about 400 percent over the same period.

In 1979, inflation was more than four times higher than now and investors were switching into assets from stocks and bonds, Bailey said.
Prices for prime London properties rose by at least 2 percent a month in 10 of the last 11 months and have risen for 24 straight months. The increases have been driven by a combination of a shortage of properties for sale and more potential buyers, said Knight Frank. The proportion of prospective buyers making an offer rose 8 percentage points since November to more than 20 percent.

Mittal, Abramovich
``The majority of growth has been in the market above 4 million pounds as shortages of stock continue to drive prices upward,'' said Bailey. ``We anticipate stock levels to improve in the new year as people return to the market.''

Lakshmi Mittal, chairman of the world's largest steel company, paid 70 million pounds in 2004 for a 12-bedroomed house in Kensington Palace Gardens. Other buyers of prime London properties in recent years include Roman Abramovich, Russia's richest man and owner of Chelsea Football Club, and brewing heiress Charlene de Carvalho-Heineken as well as Russian billionaire Boris Berezovsky, who was granted political asylum in the U.K. in 2003.
Knight Frank's survey covers apartments that cost an average of more than 1.5 million pounds and houses valued at an average of about 3 million pounds in seven central London postal districts.

Knight Frank currently has 27 properties for sale costing more than 3 million pounds in the seven postal districts covered by the survey. The most expensive is Swan House on Chelsea Embankment overlooking the River Thames, which is on sale for 32 million pounds. The three-story house offers 19,000 square feet of living space, a gym, cinema, ballroom, a swimming pool and staff accommodation for 22.

London is the most expensive city in the world for prime real estate, CB Richard Ellis Group Inc. said in September. Prices in neighborhoods such as Chelsea and Hampstead averaged $2,244 a square foot in the second quarter. The same space for Manhattan homes -- on Fifth Avenue, Park Avenue and Madison Avenue near Central Park -- cost about $1,870 a square foot.

The bonus season for the 330,000 workers of financial firms in London lasts from December to April, from the first announcements to the final payouts, according to Knight Frank.