Room at the top

Penthouses are back in vogue, says Jessie Hewitson. The record prices reflect our new-found desire for spacious, urban living

Penthouses are back. After years confined to property purgatory, these trophy flats are now once again in favour with buyers and achieving record prices. The four penthouses in the Richard Rogers-designed One Hyde Park in Knightsbridge are reported to be on the market for £85m—each. According to newspaper reports, at least one of these has now been sold, making it the most expensive property in the world. This uber-flat boasts 20,000 sq ft of space, a purified air system, panic room and bulletproof glass in case any would-be assassins have some seriously high-rise ambitions. Owners can also order dinner from the nearby Mandarin Oriental hotel and expect to have their meals transported straight to their door via an underground tunnel, which is currently being built between the development and the hotel. 

The market is strong internationally, too. Forbes magazine recently compiled a report of the 10 most expensive penthouses in the US. Prices ranged from £2m for a top-floor flat in Seattle to £35m for the penthouse in New York's Pierre hotel, which, when compared with One Hyde Park, seems a snip. For £35m you get 14,000 sq ft of space, five bedrooms, seven bathrooms, five fireplaces, your own ballroom and 360-degree views of the rabble below.

There is also a competition raging between Chicago and Dubai for which city can claim the highest penthouse—and therefore tallest residential building—in the world. Both claim to have pipped each other to the post, but we are unlikely to know for sure until the buildings—the Chicago Spire and the Burg Dubai—are fully built.

But it hasn't always been such a boom-time for these flats. The four-bed, three-bathroom Battersea penthouse in the Norman Foster-designed Albion Riverside development, on the market for £5.6m through Quintessentially Estates, has remained stubbornly unsold for five years, languishing on the market while the flats below it have changed hands several times. Another penthouse in a high-profile development, St George Wharf, was bought in 2001 for £3.95m only to be sold at a loss, at £3.1m, in September 2004.

"They were seen as a white elephant for a time, and hard to sell, but I don't think that is the case any longer," says Matthew Smith, of Knight Frank's Riverside department. "It's hard to see why the change has happened. I think it's because generally, as a country, the UK hasn't been one for high-rise, but now we're accepting it, along with a move towards more modern property. Also, we're seeing lots of international buyers snapping up our penthouses."

Lucy Russell, managing director of Quintessentially Estates, the property-buying arm of the concierge service, has also found that international buyers have buoyed the market for this type of flat. Russell claims that the average budget for the penthouses she sources for her clients varies widely from £7m up to about £30m.

"For a lot of our international buyers only a penthouse will do," she says. "They want the views, the large terraces, not to mention the prestige. You only get penthouses in modern, new developments that come with security, concierge and underground parking. Our American, Russian and Chinese clients love having someone always there, someone who can be on hand at the touch of a button. We've also worked with high-profile clients who have chosen penthouses because of the security they offer, and the fact they come with two or three parking spaces."

"The appeal of these flats is that the views tend to be spectacular, of course, and no-one is above you," says Smith. "It's the best you can get in a modern development: the ceiling heights tend to be higher and the quality of finish more impressive. Many of the penthouses I've seen include fitted cappuccino machines and Boffi and Poggenpohl kitchens."

Strictly speaking, penthouses should occupy the entire floor (though some penthouses sub-divide the top floor into two or more flats) and be built to a higher specification than the flats below them, with an abundance of space and higher ceilings, giving better light, and, ideally, an uninterrupted patio framing the entire flat.

"The word 'penthouse' can be a bit misleading as you sometimes see penthouses that are the mirror-images of the flats below," says James Hyman of the Tower Bridge office of Cluttons. "This is not a true penthouse. There are very few true penthouses being created these days and quite a few imitations, probably because developers can make more money creating two flats from the top floor instead of one."

Naturally, he claims to be currently selling the genuine article: a top-floor flat perched on the 16th and 17th floors of Vogan's Mill, in Southwark, with 3,000 sq ft of space, 360-degree views and occupying the entire two floors. The flat is on the market through Cluttons for £4m. "It's like being at the top of the London Eye," says Hyman. "There is no major landmark that you can't see."

With a downturn in the market, penthouses have so far proved more resilient to price falls. Penthouses were the only property type not to record an annual price fall in January, according to Smartnewhomes.co.uk, a site representing 85 per cent of all new homes in the UK. This type of flat grew by 3.5 per cent in January, while flats and townhouses fell by 0.9 per cent. Despite the impending £30,000 annual levy on non-doms and other tax changes, estate agents report that there is still strong demand for property at the top end of the market, which includes penthouses, from international buyers.  

Retirees are also proving a surprising growing market for this type of flat. "The profile of our buyers is generally young couples, perhaps without children, and downsizers. We are seeing an increasing number of retirees who have been living in the country looking to move into the city again, now their kids have flown the nest. They want the ultimate in city living—and that means a penthouse."

Useful contacts
www.cluttons.com
www.knightfrank.co.uk
www.quintessentiallyestates.com