LONDON VAUXHALL DEALERS

Luxury-home prices in central London rose the least in nine months in May, after the British government increased a tax on purchases of 2 million pounds ($3.1 million) or more, Knight Frank LLP said.

Values of houses and apartments costing an average of 3.7 million pounds climbed 10.7 percent from a year earlier, the London-based broker said in a report today. That was the smallest gain since August 2011. Prices rose 0.7 percent from April, bolstered by buyers from mainland Europe.

Chancellor of the Exchequer George Osborne raised the tax, known as stamp duty, to 7 percent from 5 percent in March. The threshold for the new tax rate is now the average asking price of a home in Kensington and Chelsea, one of London’s most affluent neighborhoods, property-listings website Rightmove Plc said when the government announced the change.

“The market has absorbed the 7 percent duty rate fairly well,” Liam Bailey, head of residential research for Knight Frank, said in the report. Prices for homes valued at more than 2 million pounds rose 1.6 percent in the past two months, while those for all luxury properties gained 2.7 percent, he said.

Europe’s debt crisis has prompted overseas investors to acquire real estate in London to preserve their wealth. Luxury- property prices in the city have increased about 12 percent since the market’s peak in 2008, including 4.7 percent this year, as a scarcity of homes for sale drove up values.

German Buyers

“We are now seeing a noticeable uptick in interest from France, Italy, Spain and even German-based purchasers,” Bailey said in the report. That contributed to the 19th monthly price increase in a row.

The crisis, now in its third year, threatens to destroy Europe’s 17-nation currency union as Greece contemplates exiting the euro and Spain sees its bond yields rise and banking industry falter. The euro zone’s collapse could cause prime central London property values to fall as much as 50 percent, Development Securities Plc (DSC) said in a May 31 report, as capital flows out of the city to less expensive markets.

“The ‘safe-haven’ effect has clearly played its role in attracting foreign money into London’s most desirable post codes,” Chief Executive Officer Michael Marx said in the report. “However, the property industry knows -- perhaps better than most -- that nothing goes on forever.”

Foreign Residents

Foreign buyers accounted for about 60 percent of home purchases in London’s most expensive districts in the four years through 2011, according to London-based Development Securities. As a result, more than half of the residents of Kensington and Chelsea and the City of Westminster are from outside the U.K.

House prices across the country rose in May for the first time in three months as a lack of homes for sale supported values, Nationwide Building Society said May 31. Values gained 0.3 percent from April and fell an annual 0.7 percent to an average of 166,022 pounds.

Knight Frank compiles its luxury-homes index from its own appraisal values of a sample of the same properties in the 13 most expensive neighborhoods of central London, including Belgravia and Knightsbridge.

To contact the reporter on this story: Chris Spillane in London at cspillane3@bloomberg.net.

To contact the editor responsible for this story: Andrew Blackman at ablackman@bloomberg.net.

Vauxhall leads Ampera race

Throughout their descriptions of the 70-day Olympic torch relay, the London 2012 organisers talked of having tracked down "8,000 truly inspirational people from across the UK". But while most of the torchbearers were picked through this process, some people – including one of the world's richest men – managed to get on the torch relay by another means: working for, or being affiliated with, one of the London 2012 sponsors.

More than 1,200 spaces were allocated to the International Olympic Committee, the British Olympics Association, and to staff working for Games sponsors – whose picks included company directors, Russian newspaper editors, and even an official at the US's Food and Drug Administration.

Help Me Investigate the Olympics, a crowdsourced news coverage site dedicated to London 2012, looked into torchbearer slots handed out by one particular sponsor, Adidas.

While, generally, slots had been given to junior or mid-level employees, Adidas had also selected Christos Angelides, the £900,000-a-year senior director at Next, which has a retail partnership with Adidas covering the Olympics. Other Adidas slots went to people in the marketing team who had worked on the company's sponsorship.

The group's findings, posted by Paul Bradshaw, also noted descriptions of staff's work performance in their nominating stories, mentioning that one torchbearer had "made a fantastic contribution to the Adidas group business". Another "breathes Adidas … Her positive attitude and 'money in [the] till' approach is legendary" and a third mentioned "achieving my sales targets in every market I have worked in".

A spokesman for Adidas said the firm was restricted by Locog rules and could only offer its torchbearer slots to employees or those in its network. He added that owing to the low average age of the company's staff, not many of their children were old enough to carry the torch.

Other sponsors struck further afield for their choices: among Coca-Cola's selections were the Las Vegas resident Dr Debra Toney, who among other roles sits on a committee of the US's Food and Drug Administration.

Coca-Cola also selected Evgeny Faktorovich, the deputy editor-in-chief of a Russian paper that "supports all social initiative held by Coca-Cola" and Vonta Vontobel, the president of the Brazilian Bottlers Association of Coca-Cola.

Coca-Cola, as an official torchbearer partner, was able to allocate places to members of the public – it was responsible for allocating 1,350 slots.

"Over 90% of our allocation has gone to members of the public through our Future Flames campaign, which celebrates inspirational people by giving them the once-in-a-lifetime opportunity to carry the Olympic flame," said a spokesman. "A small number of our allocation has been given to some of our employees through a nomination campaign, and to our campaign ambassadors who have helped to find our Future Flames. Our remaining places have been given to our partner organisations and their affiliates."

ArcelorMittal, another organisation supporting the Olympics, was given six torchbearer slots. Two of these went to the company's founder, Lakshmi Mittal, the world's 21st richest man according to Forbes magazine, and his son Aditya, the group's chief financial officer. Among the others, however, were the US technician Angel Alvarez, who donated his kidney to a fellow worker, and Polish employee Filip Kuzniak, who cycled 600km to raise money for a colleague's daughter.

Among 50 torchbearers selected by BP were Gillian James, a member of the company's North Sea leadership team, and Carl Halksworth, the creative director of Landor, BP's design agency partner for the Olympics. As BP sponsored a particular section of the route, near Aberdeen, the remainder of its picks were made up predominantly of "onshore and offshore BP staff, young relatives of staff, business partners, and nominees from local schools, universities and charities".

The electricity giant EDF, meanwhile, included the group's former director of HR and communications among the 71 staff members chosen to carry the torch on the company's behalf.

A London 2012 spokesman said: "Staging the Olympic Games is a huge undertaking and we couldn't do it without the support from our commercial partners. The rights packages for some partners include a small number of torchbearer places that had to be filled through internal campaigns.

"The same torchbearer selection criteria applied across the whole relay – ie personal bests and/or contribution to the community."