Sunday, December 10, 2006

London House Prices Boom on Demand From Bankers

" There's a kind of money coming in which is quite unreal.''

yes, it is! / das stimmt wohl!

thanks to john from "housingdoom"

Dec. 11 "bloomberg" -- London house prices rose in the past month at the fastest annual pace in at least four years, fueled by demand from bankers as bonus season approaches, ......

Average asking-prices in the U.K. capital rose 24 percent to 355,097 pounds ($697,000) in the three weeks through Dec. 2 from a year earlier, the most since the index began in August 2002, Rightmove said today. The gains helped push U.K. house-price inflation to 13 percent, the fastest pace since October 2004.

A shortage of property and the prospect of a banking-bonus round worth as much as 8.8 billion pounds have helped the housing market absorb higher interest rates. The Bank of England raised its benchmark rate twice in the past four months to 5 percent. Rising home values will support consumer spending, which accounts for two-thirds of the economy, (sounds more and more like an us/new york twin..../hört sich immer mehr nach einem us bzw new york zwilling an.....)

``A million pounds can get a relatively ordinary property in London,'' said Miles Shipside, commercial director at Rightmove. ``Prosperous people want to buy three or four-bedroom houses and we're not getting enough of them. There's a limited supply.''

U.K. house prices will rise 6 percent next year, led by a further increase in London, Rightmove predicted. .....

Price Pressure
``There'll be a lower volume of property sales because fewer people can afford to move,'' Shipside said. ``That will keep upward pressure on prices. And then the London market has also still got some time to run.''

Shares of Berkeley Group Holdings Plc, a U.K. homebuilder focused on London and the southeast, have surged 54 percent this year,......

``A lot of people want to call the top of the market but we've had a strong 2006 and we'll have a good, solid market in 2007,'' Lewis said. A lack of supply linked with planning delays and a pause in interest-rate rises will encourage sales, he said.

London prices rose 2.9 percent from the previous month. The gains in the U.K. capital contrast with the rest of the country, where asking prices fell 0.3 percent in the month, the first decline since August. (thanks to the financial bonanza...... / dank den finanzakrobaten....)

Russian Influx
The biggest annual gain was in Kensington & Chelsea, where home values rose 56 percent. The district has London's priciest homes, which cost an average 1,116,041 pounds. Demand from Russian and French investors has driven up prices, Rightmove said. (also the home to lots of hedge funds!)

Russians are the biggest group of foreign nationals buying in London and for homes worth more than 10 million pounds represent about a quarter of the market (can this be right? / kann das stimmen?)

Financial services companies expect to have as much as 25 percent more cash for end-of-year bonuses than in 2005, .....

``I suppose the previous booms like this would be in the early 1970s and the late 1980s,'' ......... There's a kind of money coming in which is quite unreal.''

Luxury Market
Knight Frank expects luxury house prices in London to rise 12 percent next year after an increase of about 27 percent this year.

``The impact of demand from the City of London has meant that the traditional end-of-year slowdown is increasingly becoming a thing of the past in London,'' said Bailey. (wait for the next maybe so fat bnous rounds. they are coming...../ da sollte er lieber die nicht so fetten bonusrunden in den nächsten jahren abwarten....)

``Everything in London is booming,'' said Charles Gallagher, Chairman of Abbey Plc, a homebuilder based in Dublin. ``In places like Chelsea, it's a case of sell to which Russian you want to.''

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