Tax future house price bubbles, Bank of England tells Treasury

A leading Bank of England policymaker has called on the Government to raise taxes to prevent housing booms in the future.

Adam Posen, an independent member of the Bank's Monetary Policy Committee, said in a speech yesterday that the authorities should seek to limit house price bubbles because of the damage they inflict on the rest of the economy when they burst. He also suggested that property speculators and second home owners be subject to additional restraints.

Adam Posen, an American economist who joined the MPC this year, said: "Real estate bubbles tend to have much higher real economic costs than equity bubbles, perhaps because they involve illiquid collateral and local spillover effects."

Mr Posen suggested that real estate taxes, which include stamp duty and capital gains on properties apart from a main residential home, could be used as "automatic stabilisers" – rising during a boom but falling in a slump.

Qatari firm buys U.S. Embassy building in London

LONDON, England (CNN) -- The U.S. State Department has sold its London embassy building to a Qatari real estate company, the embassy announced Tuesday.

The signing of the deal is another major step in the embassy's plans to relocate from its longtime headquarters in central London to a new site in Wandsworth, on the south bank of the River Thames.

It wasn't immediately clear how much Qatari Diar Real Estate paid for the embassy building in Grosvenor Square, whose 1960s facade was recently given listed status, meaning its design can't be changed.

Latest uk govt figures show property prices reach five year high

Residential property prices in England and Wales have reached a five year high, according to the latest land registry figures with others reporting a strong demand for prime real estate in London.

The Land Registry, which records all completed property transactions and is widely regarded as producing one of the most authoritative house price reports, says that prices increased 1.7% in July, the strongest monthly growth since July 2004.
It compares the price of properties sold now with the price paid when they were sold previously. But it does lag behind data from lenders and repossessions and property transfers following a divorce are excluded.

West of England showing real estate market recovery

West England showing property recovery

The West Country is leading the property recovery in England with parts of Somerset, Wiltshire and Devon showing positive growth, according to a new report.

A comparison of property prices performance in the last six months compared with the last half of 2008, also shows that the north is struggling the most but affluent areas like Cheshire and Suffolk are also amongst the worse performers.

North Somerset leads the way with prices up 1.4% this year followed by Wiltshire, up 1.24%, Plymouth up 0.77%, Bath up 0.39% and Oxfordshire, up 0.08%, according to the report from Zoopla.co.uk, a leading house price information website.