London no longer world's most expensive city

The British capital now ranks third behind New York and Hong Kong as the cities with the highest property values, according to luxury real estate broker Savills.

The falling pound has accelerated the cooling real estate market following the UK vote to quit the European Union, according to the research.

The study analyzes the costs for an average employee to live in a city in a rented apartment and work in an office for a year.

London had been at the top of the rating for the last two-and-a-half years, but slipped in July shortly after the Brexit vote.

The British currency has dropped by nearly 12 percent since the ‘yes’ vote was announced and is currently down by about 11 percent since the beginning of the year. This has considerably cut housing costs and office rental in US dollar terms in comparison with the other global cities.

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According to Savills, in July the total live-work accommodation per person in London fell 11 percent to $100,141. New York and Hong Kong were more expensive for staff location. The cost of living in the other financial hubs was fixed at $114,010 and $100,984, respectively.

Tokyo was the fourth in the rating with accommodation costs rising 22 percent to $85,334, according to the Savills data. This echoes a 16-percent upsurge by the yen against the dollar since the start of the year.

“For the last two-and-a-half years London has held top spot, reflecting the strength of its economy and high demand for space from a wide variety of occupiers, but the impact of currency falls post-EU referendum has made London very much more competitive on the world stage,” said Yolande Barnes, head of world research at Savills.

The Savills survey is focused on property costs for employees engaged in the financial services and creative sectors, which are seen as key drivers for global cities’ economies, according to Barnes.