Luxury costs a little less

By Simon Packard  |   2008-11-3  |     NEWSPAPER EDITION

LUXURY-HOME values in central London, the world's most expensive site for prime real estate after Monaco, fell the most in 32 years in October because of the crisis in financial markets, Bloomberg News said on Saturday.

The estimated average value of a house or apartment in the city's nine most expensive neighborhoods fell 3.9 percent from September, according to an index compiled by Knight Frank LLP. It was the biggest drop since the index was started in 1976. Property values declined 10.8 percent from October 2007, the broker said. The index covers homes mostly valued at about 1 million pounds (US$1.62 million) or more.

The stalemate over price between buyers and sellers may be easing, the broker said, as the worst banking crisis since World War I drives the British economy into a recession. Demand has fallen as bankers and others employed in financial services face job cuts and lower bonuses.