London houses push through the higher tax bracket

This month saw the average London house push through the £250,000 barrier, leading to calls to raise stamp duty tax thresholds as Londoners get hit with the double whammy of higher prices and higher taxes. According to BN prices of top apartments in London broke through fresh records last month.

1976, you may recall, saw a hot summer. We had never heard of global warming back then, it was just one of those statistical quirks, when temperatures hit all time records. It was also the year that London real estate agent Knight Frank LLC started to monitor the prices of prime London properties, and it’s been happily maintaining this index ever since.

Then, last month, the index soared, rising three percent in just one month, and that is the highest monthly increase ever recorded.

This time it is no statistical quirk; the soaring temperatures in London’s property market are caused by the global warming in finance markets. And the Atlantic conveyer of business, the finance world’s answer to the Gulf Stream, seems to have changed its pattern. This is thanks in part to Sarbanes Oxley, which makes investors feel as though US markets are being held back by a straitjacket of regulations. As a result, the city is booming, and business is heading away from the US to the UK .

The Knight Frank LLC index for prime properties relates to houses worth over £3 million, and apartments costing more than £1.5 million.

Bloomberg quoted Liam Bailey, head of residential research at the company, as saying: "It’s the bosses rather than highly paid bankers who are leading the way. There is no doubt that the key to the price growth seen in Belgravia and Knightsbridge is international demand."

Of course a three percent rise in your London homes costing £3 million, works out at around £100,000 a month. Still, with City bonuses being what they are these days, that’s just peanuts.