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London Luxury-Home Prices Rise on Lower-Taxed Property

Business Week
London Luxury-Home Prices Rise on Lower-Taxed Property - luxury property - London

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 ($3.3 million) to 7 percent from 5 percent starting in April. The number of luxury 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 in a statement.


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