24 Sep London Luxury-Home Prices Rise on Lower-Taxed Property
Luxury-home prices in central London rose at their fastest rate in three months in September, powered by demand for properties that escape a new higher rate of sales tax, Knight Frank LLP said. The average value of a house or apartment in the U.K. capital’s most expensive neighborhoods climbed 0.7 percent from August, according to an index compiled by the London-based broker. The annual increase was 10 percent compared with a 13- month low of 9.9 percent in August.
Chancellor of the Exchequer George Osborne raised sales tax for properties valued at more than 2 million pounds ($3.25 million) to 7 percent from 5 percent starting in April. The number of homes sold that weren’t subject to the higher levy rose by 23 percent in the third quarter from a year earlier. That lifted prices in the bracket by about 12 percent, Knight Frank said.
“London’s market performance continues to be aided by overseas buyers, who account for more than 50 percent of buyers in the 2 million-pound plus market,” Liam Bailey, Knight Frank’s head of residential research, said today in a statement.
Russian, Indian, Italian, U.S. and French nationals were the biggest buyers from overseas, the broker said. Foreign buyers accounted for 41 percent of prime London homes purchased for 1 million pounds or more.
Values have risen 51 percent to a record since March 2009, the low point for London’s prime residential market after the financial crisis, according to the report.
Knight Frank compiles the index from its own appraisal values of a sample of properties in the 13 most expensive central London neighbourhoods, such as Belgravia, Mayfair, Kensington and Knightsbridge.