London has knocked Hong Kong off the top spot as the world's most expensive city to live and work in. As David Pollard reports, there are pros and cons to being number one.
London. Some love it. But if you loathe it, you have even more reason to. Because it's now the most expensive city in the world. Costing a bank-busting $121,000 a year per employee. That's according to new figures from property agents Savills - but whose director of research Yolande Barnes says the benefits far outweigh the costs. SOUNDBITE (English) YOLANDE BARNES, DIRECTOR WORLD RESEARCH, SAVILLS: ''Incredible variety and mix of very long-term infrastructure. We've had a Tube for longer than other world city, for example. But there's cultural reasons, there's business reasons, there's legal reasons. From a real estate point of view, the security of title, the certainty of the investment is a very powerful draw.'' Savills have added up the US dollar cost per employee of renting living and working space. Back in 2008, Honk Kong topped the table - and for an unbroken four years after that. London ranked a lowly fifth. Look now and London is number one - costs here driven up nearly 40 per cent over that five year period. Rising property values are a factor - and the soaring value of sterling. Plus the fact that London has always attracted cash. Phillippe Gijsels of Fortis Bank is a London lover. SOUNDBITE (English) FORTIS BANK, CHIEF STRATEGY OFFICER, PHILLIPPE GIJSELS: ''You attract a lot of people and often also people with money that see London as a safe haven and are willing to pay a lot of money to have their place there. And that of course drives up prices. Now I think it's also a symptom of the fact that there is a lot of liquidity in the system and a lot of liquidity flows to assets, to bond markets, to equity markets but also real estate.'' But if the thought of another commute makes you suicidal, there are cheaper places to be. The current bargain basements are Rio and Mumbai, both at around $30,000 a year. Savills are tipping others to join the top twelve in a decade or two's time. SOUNDBITE (English) YOLANDE BARNES, DIRECTOR WORLD RESEARCH, SAVILLS: ''Oh, I think the next 20 years will be incredibly interesting for world cities. For a start we expect there to be more on the list. So perhaps an African city, maybe Nairobi or Lagos, getting up there. Rio will probably probably gain in prominence as a South American centre.'' Samba and sun-soaked beaches - or signal failure on London's suffering Underground. The choice is yours.