A six-bedroom apartment that would normally cost more than £10 million is set to sell for as little as £500,000.
But it comes with a catch — the buyer can only live there for three-and-a-half years.
The flat is on Eaton Square, a Belgravia address that has been home to royalty, aristocracy, politicians and film stars since it was built in the 19th century.
Similar apartments on the square are valued at more than £18 million but the short-lease flat has a £500,000 guide price — the same as a garage that went on sale in Kensington last year.
The flat has 3,391 sq ft of space, which includes six bedrooms, three reception rooms and four bathrooms. It will be sold by Allsop Auctioneers on September 17. Stamp duty is about £15,000.
At a total price of £515,000, it works out at about £147,000 per year, or £12,000 per month — the same as a two-bedroom rental on the square.
But if someone bought the flat with a long lease they would have to pay more than £1 million in stamp duty alone.
When the lease ends in 2019 the flat returns to the freeholder, the Grosvenor Estate, but could be extended by negotiation. Seamus Wylie, from local estate agency Ayrton Wylie, said: “It is a large flat in a great building with a fantastic location but needs a lot of work.
“Because of the lease length I think it will have a smaller market. I suspect whoever buys it will immediately look to increase the lease to 20 years and then carry out the work on it.
“Properties like this are often bought by older people who want a nice home in a good area but don’t want to have to swallow up a lot of money. It will be an interesting sale.”
Independent buying agent Henry Pryor said: “Buying a flat like this with a more traditional longer lease could cost more than £10 million.
“The Chancellor George Osborne would want £1.113 million in stamp duty land tax now — so you could afford to rent this flat for nearly five years with just the SDLT.
“This illustrates just how expensive buying on the top rung of the housing ladder has become, why transactions in prime central London have plummeted and gives us a clue as to the future direction of prices for the most expensive homes.”
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