Luxury-Home Prices in London Advance Before Sales-Tax Increase - Businessweek

Luxury-Home Prices in London Advance Before Sales-Tax Increase - Businessweek

March 25 (Bloomberg) -- London luxury-home prices rose at the fastest rate in a year in the first quarter as overseas buyers vied for trophy properties in the city center and because of a rush to beat a property-tax increase.

The average value of a residence costing more than 1 million pounds ($1.6 million) rose 2 percent from the previous three months, according to an index compiled by London-based property broker Savills Plc. Prices climbed 3.3 percent from a year earlier and are 6.2 percent below the peak in the third quarter of 2007.

An increase in sales of the most-expensive central London properties to buyers from outside the U.K. lifted the average price for transactions handled by Savills to 5 million pounds from 3 million pounds a year earlier. The sales tax for British homes costing at least 1 million pounds increases next month by 1 point to 5 percent.