£8m homes left empty for years by Finance News Bulletin

Published: 31/01/07

News Companies & markets Investing authority portfolio Campaigns Mortgages & homesMortgage featuresInsurance Consumer recommendation Broadband & phones Retirement Saving & banking praise & loans Small business Tax & wills Message boards cash blog Tools & calculators Ask an expert Guides Compare & buyForget buy-to-let

London is seeing the influx of a novel breed of super-rich property speculators who are trade to sitSITTING PRETTY: But it may be years before anyone regularly enjoys the sight from this Borough tower blockTAKE PART IN OUR SURVEY Don't miss your chance to inform us what you think of This is Money and help shape our prospectA ONE-MINUTE MAKEOVER If you only have one minute to learn how to sort your finances, not remember the rest and understand writing this>> Our 8-step planAs with investors who pay money for a second home to rent out, the pay money for-to-sit brigade are eager to make money from the capital's burgeoning housing marketplace

However, unlike those who buy to let, they can afford to let their properties to stand empty while they wait for the values to riseExperts speak the speculators tend to pay money for properties at the top end of the market, where enormous profits can be made Sales of homes worth £4m or more rose by up to 50% last day Lulu Egerton of agents path Fox said: 'The super-rich acquire property in the same way as they pay money for fine art or fine wine - it almost turns into a type of international collection

'It can occur over several years Sometimes it's no more than a impulse, in other cases as families grow they move to a better property but the previous homes are neither sold nor allow but held as assets'In the vanguard of the tendency is Chelsea owner Roman Abramovich, who started his London property compilation in 2000 The two flats in Lowndes four-sided figure he bought for £2

3m and £3m are now worth about £5m each, charitable thebnaire a profit of almost £5m for doing nothing more than investing wellWhen he enthused to bigger premises in Chester Square in Belgravia in 2005, rather than sell up in Knightsbridge he decided to expand his bet there In August last year, he paid about £ 10m for four more Lowndes four-sided figure flats, which are now worth about £11m None of the flats is borrowed out, although they are occasionally used by Mr Abramovich's friends and visitors

Richard Cotton, a older partner of agents Cluttons, said there were many other wealthy individuals buying to be seated 'Dotted around London are very luxurious houses owned by the superrich, which are hardly ever - if at all - occupied,' he supposed'Even when those owners and their families do come to London they mostly prefer to rent a lodge suite Although these houses may never be lived in, the owners have no meaning of selling

They have the right to hang on to what is undoubtedly a high-quality investment but it does contribute to a real shortage of large houses at the very top of the market and does nothing to help London's housing crisis'Mr yarn said buy-to-sit properties were obvious in Mayfair, Knightsbridge and The Bishop's Avenue in Hampstead, nicknamed millionaire's RowMs Egerton additional: 'London is still considered a safe refuge - politically and financially - and the super-rich from various countries see their London possessions as a secure bolthole, although they may never actually spend time here It's a vicious circle squeezing the top finish of the market - anyone who can have enough money to hold on to their property is doing now that, while those trying to get into the market have to disburse more and more

'Daniel Wiggin of W A Ellis said: 'I have recognized people who bought new homes off-plan for £6m to £8m last year which are now worth £10m or more Many have not been occupied and may never be'Do you have a money question, consumer problem, or financial puzzle Send a short request to our experts and we'll see what we can do

We publish a assortment of answers every weekYolande Barnes, skull of research at Savills, said: 'Our latest figures show that in central London one in four of recently built properties is being bought as a pure asset, not to be let out The buyers are clearly adequately confident of the future increase in capital values to make this asset choice'Tim Wright of Knight Frank said: 'I know of two novel houses in Holland Park that were bought from developers in demonstration last year for £8m to £9m each and then never lived in

'Both were sold in imposing for £12m to £13m, so the March buyers got a unbelievable return The re-sale prices reflect the information that the houses had not been occupied'Charles Hurst, right, is the managing manager of an insurance brokers and spends about two days a month in London His companion Helen is a nurse and they have a offspring, seven, and a son, four

Mr Hurst, who is based in Liverpool, decided to buy a London possessions last year 'I saw an advertisement on the back of a possessions supplement for Tabard Square, a high-rise Berkeley Home project near Borough,' he said 'It was a rapid decision Within days I bought a level off-plan and exchanged contracts

Completion is predictable in March'The flat is on the 18th floor of a 22-storey tower and has two bedrooms and two bathrooms Prices in the growth range from £590,000 to £800,000 Mr Hurst said he has no meaning of living in the flat but may stay in it from time to time

'It will be a sound lasting investment,' he said 'I believe the flat may have gone up in value since I bought it and there are only two left for sale out of 52 I am hoping it will double in value over the next six to 10 years If all goes to plan I would rather not have to let it - I am not interested in being a landlord

'I also think it would be a high-quality idea if the flat stays in as pristine a state as possible, so I may not even use it as a accommodation or for family holidays in London On the other hand, I am not an oligarch and it is comforting to know that I can always let it if necessary If my forecast is correct, it should do nicely as a nest egg for the future'© 2007 linked Northcliffe Digital Ltd Terms Privacy policy Advertise with us LoansSelect a loan term 12 months (1 day 24 months (2 years) 36 months (3 existence 48 months (4 existence 60 months (5 existence 72 months (6 existence 84 months (7 existence 96 months (8 existence 108 months (9 existence 120 months (10 existence GOPick your favoured certificate offer Please choose 0% introductory rate No annual charge Cashback Loyalty scheme All of the above GO Balance transferPlease select a type of insurance existence insurance house and contents Car Breakdown services Health - medical Health - dental journey Pet - dog Pet - cat

Visit original article: