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Rediff.com  » Business » Home prices crash to half on Laxmi Mittal street

Home prices crash to half on Laxmi Mittal street

January 19, 2009 18:38 IST

In a sort of double-whammy to Lakshmi Mittal, the value of three houses owned by his family on UK's costliest street has nearly halved in about six months, while the NRI steel tycoon's stock market net worth has plunged to about one-third in the same period.

The city's Kensington Palace Gardens, where the Mittal family has purchased three houses, was named as the costliest in a ranking of Britain's 20 highest-value streets released by property website Zoopla in July last year. The street is also known as Billionaire's Row.

The ranking had put the average price of a house on the street at that time at pound 41.4 million, which has now plunged to pound 23.5 million. However, Kensington Palace Gardens is still the costliest street in Britain, as per the latest data available with Zoopla.

On this private avenue, lined with trees and dotted with foreign embassies, Mittal purchased a pound 70 million house for his daughter Vanisha in June last year. This purchase came close after a world record pound 117 million mansion bought for his son Aditya. About four years ago, Mittal had purchased his first house on Billionaire's Row for about pound 57 million.

At the time of the purchase of the family's last house on the street, the combined value of the three properties was said to be valued at about pound 440 million -- nearly pound 200 million more than the amount paid for these properties over a period of four years.

While the exact value of these houses at present is not known, the average price of a residential property in this area has nearly halved in the past six months, as per Zoopla data.

Taking the decline in the average price of Kensington Palace Gardens houses into account, the three houses owned by the Mittal family would now be worth about $ 200 million, an amount almost equivalent to the purchase prices.

The fall in the average home prices at Mittal street coincides with a sharp plunge in the stock market valuation of the world's largest steel maker ArcelorMittal, which is majority-owned by the Mittal family.

Based on his stock holding in the company, Mittal's net worth currently stands at about $ 15 billion -- down from nearly $ 50 billion in late July 2008, when Zoopla ranked Kensignton Palace Gardens as the Britain's costliest street.

The Central London street was once home to late Princess Diana; its current residents include a number of high-flying celebrities.

Zoopla had said in a report compiled last month that British homes were estimated to have lost over half a trillion pounds of their value in 2008. It estimated the total value of all homes in Britain at less than pound 5.5 trillion, after peaking at over pound 6.2 trillion in August 2007.

Average home values in Britain fell by about ten per cent in 2008.

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