A garage in the upmarket London district of Chelsea is set to be auctioned for £180,000 ($261,567) or more, as the escalation in real estate prices in the already expensive city continues.
The garage – set to be auctioned later this month – offers secure off street parking and has an internal area of approximately 146 square feet. It is described by estate agents at Savills as “rarely available.”
“Garages are an increasingly rare commodity in central London, where even some of the highest value properties lack off street parking,” Chris Coleman-Smith, head of Savills auctions, said in a news release.
He added that garages had attracted a premium in recent years. “While they’ve already made headlines for achieving incredibly high prices in prime central London, garages can still offer good potential returns.”
The price of the garage is close to that of the average house in England and Wales, which is £188,270, according to the Land Registry House Price Index.
However, in December the average house price in London was £514,097, representing an annual increase of 12.4 percent and highlighting the disparity between the cost of living in the capital city and elsewhere.
“It may seem out of this world to anybody recently landed within the M25 (the highway that encircles London and its surrounding counties) that the price of accommodating one car is almost the average price of a house across the United Kingdom,” a London-based buying agent, Henry Pryor, told CNBC in a phone interview.
“Clearly people are prepared to pay an awful lot of money in order to garage their – usually – very expensive motor cars,” he later added.
Even outside of London, house prices are rising steadily on average. According to the latest Halifax Price Index, U.K. house prices grew 9.7 percent higher year-on-year between November and January.
“The imbalance between supply and demand continues to exert significant upward pressure on house prices,” Halifax housing economist, Martin Ellis, said in a report.
“This situation looks set to persist over the coming months. Further ahead, increasing affordability issues, as price increases continue to exceed wage growth, are likely to curb housing demand and cause price growth to ease,” he added.