London is the world's most expensive city, according to a new report.
High property costs (the average price just went over £500,000 according to the ONS), high transports costs and expensive drinks have long been the bane of Londoners, and now a new report from Savills, an estate agent, has calculated London to top its prestigious list.
As a measure, Savills use the combined cost of renting living and office space for one employee, for a year.
London has knocked Hong Kong of the top spot, where it has sat for five years, and also beat such spending hotbeds as Tokyo, New York, Paris and Singapore.
The top four are the usually suspects identified by Savills:
These four cities have dominated the Savills Live/Work Index top 12 world cities since its launch in 2008, reflecting the relative stability of both the residential and commercial markets of more mature global cities post downturn compared to the more recently emerged new world cities.
As well as considering the property markets, the index also includes such factors as exchange rates which can affect the price of doing business.
London managed to knock Hong Kong from its perch by a combination of increasing competitiveness in the former and huge growth in house prices in the latter. From the report:
A combination of falling residential rents and, most importantly, a weakening currency, has boosted Hong Kong’s competitiveness, with total real estate costs down -5.6 per cent in the first six months of this year, an annualised rate of -11.2 per cent in dollar terms
By contrast, London real estate costs grew in US dollar terms by an annualised rate of 10.6 per cent in the first six months of the year so London has now become the most expensive world city in which to accommodate staff, at $121,000 per year. This was largely due to the UK pound’s recent appreciation against the US dollar.
London house prices rose 11.7 per cent in the year to July, according to the latest figures from the ONS. By some measures, such as Righmove's index, the average asking price in London is climbing towards £600,000 as this map shows.