Kensington and Chelsea helped to push the asking price of a London home to a record this month as average values in the district broke through the 2 million-pound ($3.17 million) level for the first time, Rightmove Plc (RMV) said.
Asking prices in Kensington and Chelsea increased 5.9 percent from February, the operator of Britain’s biggest property website said in a report today. Values in London rose 1.3 percent to 455,159 pounds, while the average price across England and Wales gained 1.6 percent to 236,939 pounds.
“The traditionally buoyant spring market has combined with a shortage of supply and brisk turnover of property,” said Miles Shipside, commercial director of Rightmove. “Sellers again have the confidence and required level of funds to motivate them to trade up, though no doubt some are deciding to take advantage of the record prices and trade out.”
Chancellor of the Exchequer George Osborne said yesterday that he plans a crackdown on tax evasion on property transactions and that his budget in two days will aim to help lower-income workers. Osborne is trying to win the backing of his Liberal Democrat coalition partners, who have called for a “mansion tax” on expensive homes.
Business Secretary Vince Cable, a member of the Liberal Democrats, has said that the threshold for the levy should be houses valued at more than 2 million pounds.
U.K. housing is getting a temporary boost as first-time buyers move to beat the expiration of a property-tax exemption this month. A price gauge by the Royal Institution of Chartered Surveyors rose to a 19-month high in February.
Rightmove said indicators suggest that property-market activity in 2012 will be “more robust” than last year. Still, it added that the end of the exemption on a transaction tax for some first-time buyers is a “potential blow to the all- important lower end of the housing market.”
From a year earlier, home prices in England and Wales were up 2.2 percent in March, Rightmove said. In London, the annual increase was 7.3 percent. Nationally, all 10 regions of England and Wales tracked by the company showed asking prices gained in March from February.
Osborne has sought to calm speculation over whether he will scrap Britain’s top 50 percent income-tax rate by promising to use his budget this week to help less well-off workers. Pledging “extremely aggressive” measures to stop tax evasion, particularly on property, Osborne said yesterday that the budget will include changes “for lifting low-income people out of tax.”
The chancellor wants to erase by 2017 the bulk of a budget deficit that equals 9 percent of gross domestic product. Fitch Ratings cut its outlook on Britain’s AAA credit rating to negative earlier this month.
The Liberal Democrats say their priority is to take more low-income households out of paying tax altogether. Cable said on March 6 the party is willing to scrap the top tax rate as long as Osborne’s Conservatives agreed to introduce new taxes on the wealthy. Osborne said a decision was made last week on whether to cut or abolish the 50 percent tax rate on earnings above 150,000 pounds, without saying what it was.
European stocks fell today, snapping a rally that drove the region’s benchmark equity index to an eight-month high.
The Stoxx Europe 600 Index (SXXP) broke a four-day rally, slipping 0.4 percent as of 11:10 a.m. in London, and Standard & Poor’s 500 Index futures lost 0.2 percent. The yield on the 10-year Treasury note declined 2 basis points to 2.27 percent while the yield on the U.K. note fell 5 basis points to 2.4 percent.
In Asia, International Monetary Fund official Zhu Min said China will avoid an economic hard landing even as government data showed property prices falling in most of the nation’s biggest cities. “China’s heading for a soft landing,” Zhu, a deputy managing director at the IMF, said in Hong Kong today.
At the same conference, Reserve Bank of Australia Governor Glenn Stevens also expressed confidence in an economy he said is closing in on that of the U.S.
The U.S. National Association of Home Builders/Wells Fargo may say its index of builder confidence rose for a sixth straight month to 30 in March, from 29 in February, according to the median estimate in a Bloomberg survey. The report is due to be published at 10 a.m. in Washington.
A report in Europe today showed construction output dropped for a second month in January, as declines in Spain and Italy offset gains in Germany and France. Construction (EUCPTSAM) in the 17- nation euro region fell 0.8 percent from December, the European Union’s statistics office in Luxembourg said. From a year earlier, output fell 1.4 percent.
In Italy, industrial orders fell 7.4 percent in January from the previous month, a separate report showed.
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