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The sale of my cozy "flat' tells a tale of two Londons

The futon, desk and chair have gone to live with a London actress. The couch and coffee table (or should it be tea table?) are in a charity thrift shop awaiting new owners.

Yes, after two years, it's time to bid "cheerio" to my London flat.

It was a fine, comfortable apartment, overlooking a private garden bursting with balloon-size hydrangeas in the spring and carpeted with sycamore leaves in the early fall. I'd occasionally sit on the wooden bench and pen parts of a column, listening to the sparrows chirp and the amazingly well-mannered British kids pleading, "Oh, mummy, can we . . ."

But the building's owner had a "Sale Agreed," that polite British way of saying a place has been SOLD!!! And this particular transaction, a good example of why London is increasingly a city for the rich and richer, would have been the real estate equivalent of hitting the lottery.

How would you like a 28,400 percent return on investment?

But first for some background. My flat was in a four-story Edwardian terrace house, built around the turn of the century in the west part of London. The immediate area takes its name from Holland Park, among the smaller of London's many lovely swaths of green.

When the owner and her then-husband bought the building in the 1960s, this part of Holland Park was a run-down, working-class neighborhood. The house had been carved into tiny flats occupied by the sort of people who considered a telephone a luxury.

Purchase price: 6,500 pounds or about $10,000.

While that might seem a bargain, the building was a risky investment. The new owners hoped to renovate the upper floors and rent the enlarged flats at a higher price. But it was virtually impossible to force tenants out, and the owners appeared stuck with at least one occupant _ a single woman in her 60s who could have stayed for the rest of her life.

As luck would have it, she got married and left. The owners paid another family to vacate their rooms, and began converting the cramped flats into more spacious ones.

Like the townhouse itself, Holland Park grew more desirable over time. London, long one of the world's great cities, became Europe's leading financial center and a magnet for well-heeled folks from all over the globe. Property values in central London soared to the point that areas on the fringe _ like Holland Park _ became sought-after real estate.

By the time I moved into my flat in the summer of 1998, other part-time residents of Holland Park included Microsoft founder Bill Gates, British business tycoon Richard Branson and one of the world's richest men, the sultan of Brunei.

The owners of my townhouse divorced, and the wife stayed on. As she was getting along in years, she decided it was time to sell and move closer to her daughter in north London. So earlier this year, the house went on the market and quickly got an offer.

It was for 1.9-million pounds, or about $2.85-million.

"Wow," was all I could say when she told me.

"Yes, it does seem like an awful lot of money," she agreed.

Knowing the house will only go up in value, she decided to turn down that offer and try again next spring. Britain has such steep capital-gains taxes they would have devoured more than a third of her profit. By waiting to sell until a new tax year, she can save some money.

Whenever she does sell, she'll have to fork over another big chunk of change for another place to live.

The price of the average London house is now about $290,000, 35 percent higher than last summer. (By comparison, the average new-house price in Pinellas County is $212,000 and in Hillsborough, $175,000.)

Actually, $290,000 won't buy much of anything except a couple of rooms in a less-than-lovely part of the British capital. My friend expects to spend at least $600,000 for a comfortable flat in a decent neighborhood.

"The figures for London provide further worrying evidence about property affordability for public sector workers," the Times of London noted. "Nurses, junior doctors, firefighters, police officers and teachers are finding it increasingly difficult to take up jobs in London because of house prices."

Although my building is temporarily off the market, my lease ran out at the start of September and the owner chose not to renew it. From now on, as befits a foreign correspondent, I'll stay in hotels whenever I go to London.

I imagine, though, that I'll often find myself drawn to the old neighborhood and the terrace house on Lower Addison Gardens. And, like homeowners everywhere, I'll find myself wondering:

"What do you suppose they finally got for that place?"

_ Susan Martin can be contacted at susansptimes.com.

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