renting madness in costly london

i hope its not only me coming from a small city in germany that gets the feeling that something has gotten out of control.......same seems to be true for the commercial sector http://immobilienblasen.blogspot.com/2007/02/london-calling-commercial-real-estate.html

ich hoffe es geht nicht nur mir so (komme aus ner kleinen stadt in deutschland) um das gefühl zu bekommen das in anderen teilen der welt die dinge ein bißchen aus dem gleichgewicht gekommen sind. das gleiche gilt wohl auch für den gewerblichen sektor.


NYT LONDON — Siri Eklund looked at 54 apartments here before finding one with a perk that she simply could not resist: proximity to Britain’s first Whole Foods supermarket, scheduled to open in June.....

......renting her spacious two-bedroom flat in the Observatory Gardens complex just north of Kensington High Street, one of West London’s most popular shopping strips.

She pays a weekly rent of £802, or nearly $1,600, for her 900-square-foot home. “Rent is paid by the week here and not the month,” said Ms. Eklund, who was transferred to London in December 2005 to become senior brand manager for Moët & Chandon. “And renters — not landlords — have to pay the local property council tax here.”

The monthly rent works out to £3,208, or $6,309. And the monthly tax adds another £110, or more than $200, for a total of £3,318, or $6,525.

In comparison, rents in New York averaged $3,460 for a two-bedroom apartment in a building without a doorman and $5,346 for a two-bedroom apartment with a doorman, according to January 2007 figures from the Real Estate Group New York.

Still, Ms. Eklund’s rent seems nearly a bargain considering that London is now the world’s most expensive property market. With rents in the central part of the city having climbed 5 percent last year, a penthouse in nearby Knightsbridge might have a weekly rent as high as £15,000, or $29,000.

And when it comes to buying, things aren’t much better. Buyers pay an average of $5,860 per square foot for luxury housing in Central London, compared with $5,276 per square foot in New York.

The market is being driven by a variety of factors: generous salaries and bonuses, especially those being paid out by the capital’s thriving financial sector; demand from foreign buyers and renters; and a simple lack of supply. ( nobody thinks that these bonuses are unsustainable. i think its is fair to say that the almost perfect times for the financial sector cannot last forever......merkwürdigerweise hält jeder diese boni für unantastbar. und ich denke es ist objektiv zu sagen das dies art von perfekten bedingungen im finnazsektor nicht ewig halten werden.)

Yolande Barnes, director of Savills Research in London, said she expected both consumer confidence and appetite to remain high in the coming years.

She predicts that house prices in Britain will grow by an annual average of 6 percent over the next five years. “Growth will be even greater than this in the most supply-constrained locations, like London,” she said. ( very objective.........)

The pound is approaching the $2 mark for the first time since 1992; that strength is actually what is keeping Ms. Eklund from buying a home. “I’ve got my assets in dollars,” she said, “and so I’m waiting to see what the pound will do. Everything costs about twice as much in London, but salaries are only about 20 to 30 percent higher.”

When Ms. Eklund finally came across the apartment in Observatory Gardens, she had to bid against others, raising her offer three times in the process.

“In the end, I had to pay six months’ worth of rent in addition to a six-week security deposit in order to finally win the apartment,” she said. “It can be very challenging trying to rent in London.” ......