Prices for manor houses, farmhouses and cottages valued at more than 750,000 pounds climbed at the fastest rate in more than three years in the third quarter, Knight Frank LLP said in a report today, as Prime Minister David Cameron makes reviving the housing market central to his efforts to pull the economy out of recession. Its U.K. economic growth and broader housing-market confidence, said Liam Bailey , global head of residential research at the London-based property broker. The government last week introduced the second phase of its Help to Buy program, which offers mortgage guarantees that allow purchases with down payments as low as 5 percent. The first phase, which began in April, provided interest-free loans for buyers of newly built homes. Bigger Appetite The program has contributed to the most buoyant housing market since the financial crisis, even as two thirds of 31 economists surveyed by Bloomberg described it as bad policy. The governments measure will lead to a stronger market without causing a bubble, the EY Item Club, a London-based group sponsored by Ernst & Young LLP, said in a report today. Help to Buy has obviously been a catalyst that has encouraged people, Bailey said by phone. Its stimulated appetite to get into the market and thats not only the lower-end first-time buyers — its right through into the prime sector. In July, homebuyers took out 3,900 loans of 500,000 pounds or more, the most since September 2007, according to the Council of Mortgage Lenders. Theres also more willingness to lend at higher loan-to-value ratios, according to Henry Knight, managing director at mortgage broker Springtide Capital Ltd. Two years ago, Barclays Plcs Woolwich unit, Nationwide Building Society and Lloyds Banking Group Plcs Halifax stopped agreeing mortgages for more than about 1 million pounds, but now theyve moved up to 2 million pounds and some have gone to 3 million, Knight said by phone. There are just more lenders playing in that market now. Virginia Water Knight Franks prime country-house index, based on data from the firms U.K. branches, shows that prices rose 0.8 percent in the third quarter from the previous three months. Gains were led by Virginia Water, Berkhamsted and Cobham, just outside London.
London market edges higher over US debt deadline talks
Senate Republicans are scheduled to convene Tuesday at noon to review a plan being hammered out between Senate Majority Leader Harry Reid and Republican Minority Leader Mitch McConnell that would raise the US government’s borrowing limit and end a partial federal government shutdown. “I’m very optimistic we will reach an agreement that’s reasonable in nature this week to reopen the government, pay the nation’s bills and begin long-term negotiations to put our country on sound fiscal footing,” Reid said at the conclusion of Monday’s Senate session. “We are not there yet, but tremendous progress” has been made, he said. If Congress does not raise the $16.7 trillion debt ceiling by Thursday, the US government will begin to run out of money and could start defaulting on its obligations for the first time in history. Back on the trading floor, Lloyds Banking Group (LBG) was the most traded stock by volume, with 124.19 million units changing hands, followed by telecoms giant Vodafone which saw 68.76 million units switch owners. Miner Rio Tinto was the star performer rising 4.25 percent to stand at 3215 on strong third quarter results. Petrofac was also in demand and was up 3.68 percent to 1,410 pence. Burberry was the biggest faller, slipping 7.63 percent to 1464 pence. The British luxury fashion group retreated after its chief executive Angela Ahrendts is quitting her role to become head of retail at Apple. The US technology giant Apple said in a statement that Ahrendts would oversee the “strategic direction, expansion and operation” of its retail and online stores. aI am thrilled that Angela will be joining our team,a said Apple chief executive Tim Cook. aShe shares our values and our focus on innovation, and she places the same strong emphasis as we do on the customer experience. She has shown herself to be an extraordinary leader throughout her career and has a proven track record.a Ahrendts will have been chief executive of Burberry for about eight years by the time of her departure in 2014. Capita was also under heavy selling pressure down 3.62 percent to 970.50. On the currency markets, the pound fell to $1.5980 at 5:05pm from $1.5983 at the same time on Monday, while it edged up to 1.1840 euros from 1.1785 over the same period.