The most expensive city in the world to live and work: London overtakes Hong Kong as property costs soar 18%

London has overtaken Hong Kong as the most expensive city in the world for workers to live and for companies to place staff, a new study has found.

Soaring rents combined with the strong pound has driven up the average cost per employee of renting somewhere to live and leasing office space by 39 per cent to $120,000 or £73,000 a year, according to Savills estate agents' 'Live/Work index' - making it almost twice as pricey as Sydney, and four times more than Rio de Janeiro.

Property prices in the UK capital have soared 18.4 per cent in the past year alone, encouraged by a general upturn in the economy, and that helped take London from fifth place in 2008 in the study's table to top.

It places London well ahead of other cities on the list, such as New York and Paris (third and four respectively), which along with Hong Kong are the only hubs where residential and office space
rental costs top US$100,000, or £61,000 a year.