A rise in the highest rate of income tax risks stamping out the first green shoots of recovery in the prime property market, which has suffered a sharp fall in prices over the past year.

Wednesday’s Budget was branded only 'good for Switzerland' by estate agents yesterday, who saw little to stimulate the UK housing market, but more that could threaten what some are hoping will be a recovery in house prices.

Prime central London house prices rose over the last four weeks for the first time since March last year, according to data out today from Knight Frank. Prices increased by 0.4% for the March/April period, following a decline of 23% since the peak 13 months ago.

The rally was led by property sales in Chelsea, Kensington and Mayfair, where prices rose by more than 1%. The market for homes costing less than £1m saw the strongest improvement – with a rise of 1.6% in the month – while the weakest was at the top end of the market, for homes priced at more than £10m. Such so-called 'super prime' residences’ prices fell 2.2%.

Financial Times