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London House Asking Prices Surge to Record High

May 19 (Bloomberg) -- Asking prices for London homes rose to a record this month as all 32 of the capital’s boroughs recorded increases, according to Rightmove Plc.

Values climbed 3.3 percent from April to an average 592,763 pounds ($997,000), the property website operator said today. Across England and Wales, prices rose 3.6 percent, the most for this time of year since 2002, reaching an all-time high of 272,003 pounds.

The housing market is being fueled by an improving economy, record-low borrowing costs and government incentive programs. London is leading the surge, with its annual gain of more than 16 percent almost twice the U.K. average. Rightmove director Miles Shipside said the capital needs a “mammoth” building program to boost supply.

“London has seen the most sought-after locations jump in price as they have become prized by the world’s wealthy,” Shipside said. “Based on this month’s figures, there’s little sign of an overall slowdown even though some areas look to have topped out.”

Bank of England Governor Mark Carney said last weekend that house prices pose the biggest risk to the economy and policy makers “could do more” to tackle excesses if needed. Options include imposing more checks on the affordability of mortgages, limiting types of loans or advising the government to rein in its stimulus program.

The north London borough of Haringey and the capital’s Kensington and Chelsea area saw gains of more than 6 percent this month from April, Rightmove said. Greenwich was the city’s worst-performing borough, with a 0.6 percent increase.

All 10 regions in England and Wales posted gains this month, led by the southeast region surrounding London, with a 4.5 percent increase.

To contact the reporter on this story: Scott Hamilton in London at shamilton8@bloomberg.net

To contact the editors responsible for this story: Craig Stirling at cstirling1@bloomberg.net Fergal O’Brien, Andrew Atkinson

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