To Cut Corporate Taxes, a Merger Abroad and a New Home

Executives at a California chip maker, Applied Materials, highlighted a number of advantages in announcing a merger recently with a smaller Japanese rival, but an important one was barely mentioned: lower taxes.

The merged company will save millions of dollars a year by moving â€" not to one side of the Pacific or the other, but by reincorporating in the Netherlands.

From New York to Silicon Valley, more and more large American corporations are reducing their tax bill by buying a foreign company and effectively renouncing their United States citizenship.

“It’s almost like the holy grail,” said Andrew M. Short, a partner in the tax department of Paul Hastings, which advises a number of American corporations on deals. “We spend all of our time working for multinationals, thinking about how we’re going to expand their business internationally and keep the taxation of those activities offshore,” he added.

Reincorporating in low-tax havens like Bermuda, the Cayman Islands or Ireland â€" known as “inversions” â€" has been going on for decades. But as regulation has made the process more onerous over the years, companies can no longer simply open a new office abroad or move to a country where they already do substantial business.

Instead, most inversions today are achieved through multibillion-dollar cross-border mergers and acquisitions. Robert Willens, a corporate tax adviser, estimates there have been about 50 inversions over all. Of those, 20 occurred in the last year and a half, and most of those were done through mergers.

When Applied Materials announced its deal for Tokyo Electron, it said that its effective tax rate would drop to 17 percent from 22 percent as a result. For a company that had nearly $2 billion in profit in 2011, that amounts to savings of about $100 million a year.

Last year, the Eaton Corporation, a power management company from Cleveland, acquired Cooper Industries, based in Ireland, for $13 billion, and reincorporated there. The company expects to save $160 million a year as a result of the move.

In July, Omnicom, the large New York advertising group, agreed to merge with Publicis Groupe, its French rival, in a $35 billion deal. The new company will be based in the Netherlands, resulting in savings of about $80 million a year.

Also in July, Perrigo, a pharmaceutical company from Allegan, Mich., said it would acquire Elan, an Irish drug company, for $6.7 billion. Perrigo will also reincorporate in Ireland, bringing its effective tax rate to 17 percent from 30 percent, and saving the company an estimated $150 million a year, much of it in taxes.

Ireland’s 12.5 percent corporate tax rate is a big draw for some companies. Earlier in the year, Actavis, based in Parsippany, N.J., bought Warner Chilcott, a drug maker with headquarters in Dublin, and said it would reincorporate in Ireland, leading to an estimated $150 million in savings over two years.

“These companies are doing the math and seeing they can save a couple hundred million dollars by doing this,” said Martin A. Sullivan, chief economist at Tax Analysts, a nonprofit group that publishes analysis about global taxes.

But the small fortunes saved by inverted companies amounts to billions in revenue not collected by Washington.

“The impact in any one year may not be material, but the cumulative impact over time adds up,” said J. Richard Harvey, professor at the Villanova University School of Law. “Over time, more multinationals may want to expatriate or invert, and we could wake up in 10 or 20 years and it might be a meaningful number.”

The first corporate inversion occurred more than 30 years ago, when McDermott Inc., an oil and gas company, moved to Panama in 1982. Twelve years later, Helen of Troy, which makes household goods like blow dryers, reincorporated in Bermuda. Both those inversions got the attention of the Internal Revenue Service, which enacted rules intended to stem the outflow of corporate tax dollars from the United States.

But the regulations were largely ineffectual and did not stop another wave of inversions from taking place in the late 1990s and early 2000s. Tyco went to Bermuda in 1997 to lower its tax bill. A year later, Fruit of the Loom moved to the Cayman Islands. And in 2001, Ingersoll-Rand reincorporated in Bermuda.

That flurry caught the attention of Congress, and Senators Charles E. Grassley and Max Baucus proposed legislation to further curtail inversions. “These corporate expatriations aren’t illegal,” Mr. Grassley said in 2002. “But they’re sure immoral.”

The Jobs Creation Act of 2004 included a provision that made it more difficult to invert, stating that companies that did so must have substantial business activity in the country where they reincorporate. Still, companies again found a way. In 2009, Ensco, a Dallas-based oil services company, reincorporated in London.

The Internal Revenue Service tried to clamp down further, saying that “substantial business activity” means a company must have 25 percent of assets, income and employees in the country where it moves its legal domicile, unless other conditions are met.

Now, after these successive rounds of legislation and rule tightening, the only effective way for an American company to invert is by increasing foreign ownership of its stock to more than 20 percent. And the only feasible way to do that is by reincorporating abroad as part of a merger or acquisition.

After the political scrutiny last decade, companies that invert are loath to say they are doing so for tax reasons. When Aon, the giant insurance broker, moved to London from Chicago, it denied that it was doing so for tax purposes. But in filings with the Securities and Exchange Commission, the company highlighted its tax savings.

“You don’t want anybody to think you’re doing these deals for tax reasons. They don’t want a spotlight on it,” Mr. Sullivan of Tax Analysts said. “That’s like the kiss of death.”

Indeed, few mergers are consummated solely to lower a company’s tax bill.

“You’re not going to do a merger just to get the company offshore,” said Stephen E. Shay, professor at Harvard Law School. “This should be an opportunistic benefit on top of a strategic rationale.”

Many companies that have recently moved their domicile for tax reasons have chosen European countries with low tax rates, like Ireland and the Netherlands, rather than be tarred by relocating to Bermuda or a Caribbean tax haven.

In moving to Europe, companies are looking to avoid the scrutiny brought on by moving to such obvious tax shelters, and take advantage of the more favorable business conditions in countries like Ireland, which also has a highly skilled work force.

Once inverted, companies save money through three main techniques. First, they do not have to pay the United States statutory tax rate of 35 percent on their worldwide earnings. That alone can amount to tens of millions in savings each year.

Many companies already get around this by keeping cash from foreign sales abroad. But inverted companies are free to use this cash without paying the steep repatriation tax faced by American companies.

Finally, multinationals that invert have an easier time achieving “earnings stripping,” a tax maneuver in which an American subsidiary is loaded up with debt to offset domestic earnings, lowering the effective tax rate paid on sales in the United States.

The savings can be huge. Mr. Sullivan of Tax Analysts found that four oil services companies that inverted had saved $4 billion in taxes over the course of a decade. One of those companies, Transocean, the owner of the Deepwater Horizon platform that exploded in the Gulf of Mexico, saved $1.9 billion.

There are signs that the Obama administration and Congress may try to tighten the rules again. Both the House Ways and Means Committee and the Senate Finance Committee are working on draft legislation for comprehensive tax reform that is expected to include new rules intended to curtail inversions while also trying to make the United States a more competitive place for multinationals to call home.

“There are real financial benefits, and that creates a motivation for management to look for opportunistic opportunities,” Professor Shay said. “It’s not going to change until the law changes.”

Putting a Speed Limit on the Stock Market

When Brad Katsuyama was running the U.S. trading desk for the Royal Bank of Canada, his clients would send in orders every day, but every day, when Katsuyama went to buy or sell, something would go wrong. When he wanted to buy, offers to sell shares would suddenly vanish, and the price of the stock would shoot up. When he wanted to sell, the same thing would happen in reverse. “I started to realize that, day in and day out, I was getting screwed,” Katsuyama told me recently.

The problem was that he was often too slow. Back then, in 2007, the stock market was in the middle of a significant shift. A combination of new technology and new regulations had led to the rise of firms focused on high-speed, computer-driven operations known as high-frequency trading. With the help of complex algorithms and ultrafast Internet connections, the new traders could buy and sell stocks in fractions of seconds, looking to make a seemingly infinite number of quick, tiny profits that added up. By 2009, high-frequency traders were making billions of dollars a year, and their transactions accounted for about 60 percent of U.S. stock trades.

Some of these traders acted like useful stock-market middlemen, constantly buying and selling, bridging the bid-ask gap between other buyers and sellers. But plenty of others used the new technology to foil long-term investors by trading ahead of the slower players. A trader’s algorithm might detect that Katsuyama was trying to buy 100,000 shares of a stock and then immediately start buying it to drive up the price. Indeed, certain high-frequency traders were forcing long-term investors, including those who managed funds that held ordinary people’s retirement accounts, to constantly buy higher and sell lower. The game seemed rigged.

At first, Katsuyama responded by creating an algorithm intended to make it harder for high-frequency traders to race in front of his trades. But then, he told me, he realized his clients’ real problem was not the traders themselves; it was the stock exchanges. As high-frequency traders proliferated, these platforms were adding clever services to attract their business. “If you want to solve the problem, you go to its root,” Katsuyama said. “And at the root, the problem is the market.” So last year, he and a few of his colleagues decided to leave the bank and start a new place for investors to trade. Rather than woo high-frequency traders, they would limit their advantages. Their trading platform, IEX, is set to open later this month.

The rise of high-frequency trading is often told as a technology story. Hedge funds, Wall Street banks and other firms used increasing computing power to write ever-smarter, ever-faster trading algorithms; fantastically expensive fiber-optic lines were built to increase transaction times by milliseconds. But the rise of high-frequency trading is also a result of the unintended consequences of regulation. Back in the ’90s and mid-aughts, a series of S.E.C. rules were designed to help ordinary investors by forcing stock exchanges to compete against one another. Exchanges could no longer hoard orders; if a better offer existed on another trading platform, they’d have to send it there.

It was a well-intentioned idea designed to better match buyers and sellers, but it wound up complicating things. New exchanges quickly arose to attract customers, and what is blandly referred to as the stock market soon became a complex web of more than a dozen separate exchanges. Today, it’s not just the familiar New York Stock Exchange and Nasdaq, but also lesser-known ones with names like BATS and Direct Edge. Exchanges are now basically just technology companies, rooms full of computers that match buyers and sellers. There are also roughly 50 so-called dark pools, which allow traders to trade the same stocks that change hands on ordinary exchanges but don’t require participants to post as much information. (IEX will be a dark pool with plans to grow into a full-fledged exchange.) “I don’t think anybody who was putting these rules together envisioned we would have 13 exchanges,” Charles Jones, a finance professor at Columbia Business School, told me.

Jacob Goldstein is a reporter for NPR’s “Planet Money,” a podcast and blog. Adam Davidson is off this week.

A version of this article appears in print on October 13, 2013, on page MM14 of the Sunday Magazine with the headline: TRADING PLACES. \n \n\n'; } s += '\n\n\n'; document.write(s); return; } google_ad_output = 'js'; google_max_num_ads = '3'; google_ad_client = 'nytimes_blogs'; google_safe = 'high'; google_targeting = 'site_content'; google_hints = nyt_google_hints; google_ad_channel = nyt_google_ad_channel; if (window.nyt_google_count) { google_skip = nyt_google_count; } // -->

Recent Deals Show Freer Capitalism Is Taking Hold in Japan

Japan Inc. is breaking some deep-rooted taboos.

The country’s corporate establishment has long frowned on companies that succumb to foreign takeovers, offload noncore businesses or leverage up for acquisitions. Three recent deals suggest these strictures are no longer so tight. A freer form of capitalism may be taking hold.

Start with cross-border takeovers. For decades, foreign companies could only hope to buy a Japanese counterpart if it was in financial distress. That is why the merger of the Japanese semiconductor equipment maker Tokyo Electron with an American rival, Applied Materials, came as a shock. Though Tokyo Electron is hardly on its knees, it emerged as the junior partner in an all-share deal.

Applied Materials did its utmost to sugar-coat the takeover pill. The combined company will keep a Japanese stock market listing, and both sides will nominate five directors to the combined group’s board, which Tokyo Electron’s chief executive will lead. Even so, a large Japanese company has done the previously unthinkable and voluntarily surrendered its economic independence to a foreign rival.

Panasonic’s sale of its health care business to Kohlberg Kravis Roberts for about $1.7 billion is smaller, but equally significant. That’s because large Japanese companies almost never sell their noncore units: indeed, the very concept of a business being “noncore” is anathema in Japan.

Selling to a foreign private equity firm is even more controversial. It has been only a year since K.K.R. was rebuffed by the establishment in its attempt to acquire Renesas, a troubled Japanese chip maker.

Yet despite being Japan’s largest corporate employer, Panasonic is under pressure. Its electronics business is wobbling, and last year, it canceled its dividend for the first time in 60 years.

Panasonic is keeping a 20 percent stake in the health care arm, presumably as insurance in case K.K.R. walks off with a big profit. Other big Japanese groups thinking about how best to allocate capital must now be considering similar moves.

On the face of it, the $4 billion takeover of Grohe, the bathroom fixture maker based in Germany, by the Japanese buildings materials company Lixil, looks less surprising. After all, Japanese companies have been buying overseas for years as they seek sources of growth to counteract the declining population at home. Moreover Lixil, whose chief executive, Yoshiaki Fujimori, previously worked at General Electric, has made many acquisitions.

What’s novel about the Grohe takeover is its use of leverage. Lixil is swallowing a company with an enterprise value half its own without issuing any new equity.

It has pulled off this trick by drafting in the Development Bank of Japan, a state-owned lender, as an equity partner. By parking half of Grohe with the Development Bank of Japan, Lixil keeps the target’s debt off its balance sheet. It also avoids consolidating the good will on the deal, which Japanese accounting rules would require it to amortize, thereby reducing its earnings.

Such aggressive financial engineering may be questionable, especially with the support of a state-owned institution with super-low rates of return. Nevertheless, it’s a sign that Japanese companies can hold their heads high when it comes to devising creative corporate structures.

Whether Japan’s taboo-busting deals will work out for shareholders â€" the ultimate key to their success â€" is hard to say. Cross-border mergers are tricky, and Tokyo Electron and Applied Materials have offered little detail about how and when they will actually integrate their businesses. K.K.R.’s private equity rivals will be watching closely to see whether the buyout firm has the freedom it needs to overhaul the hodge-podge of unrelated business that compose Panasonic’s health care division. And Lixil’s bet will only be declared a victory when it pays down some of Grohe’s debt and fully absorbs the group on its balance sheet.

Moreover, some of Japan Inc.’s bigger seemingly inviolable rules also remain in force. Even though the domestic market continues to shrink, Japanese companies still seem unwilling to merge with one another. That is why Japan, despite having just 40 percent of the population of the United States, still has many more car makers, brewers and electronics manufacturers.

Nevertheless, the recent breaking of corporate taboos in three novel deals suggests that Japanese executives are beginning to follow the lead unleashed by Prime Minister Shinzo Abe’s economic policies. After years of excessive caution, a shift away from some shibboleths of the past is good news for Japanese capitalism.

Peter Thal Larsen is Asia editor at Reuters Breakingviews. For more independent commentary and analysis, visit breakingviews.com.

Recent Deals Show Freer Capitalism Is Taking Hold in Japan

Japan Inc. is breaking some deep-rooted taboos.

The country’s corporate establishment has long frowned on companies that succumb to foreign takeovers, offload noncore businesses or leverage up for acquisitions. Three recent deals suggest these strictures are no longer so tight. A freer form of capitalism may be taking hold.

Start with cross-border takeovers. For decades, foreign companies could only hope to buy a Japanese counterpart if it was in financial distress. That is why the merger of the Japanese semiconductor equipment maker Tokyo Electron with an American rival, Applied Materials, came as a shock. Though Tokyo Electron is hardly on its knees, it emerged as the junior partner in an all-share deal.

Applied Materials did its utmost to sugar-coat the takeover pill. The combined company will keep a Japanese stock market listing, and both sides will nominate five directors to the combined group’s board, which Tokyo Electron’s chief executive will lead. Even so, a large Japanese company has done the previously unthinkable and voluntarily surrendered its economic independence to a foreign rival.

Panasonic’s sale of its health care business to Kohlberg Kravis Roberts for about $1.7 billion is smaller, but equally significant. That’s because large Japanese companies almost never sell their noncore units: indeed, the very concept of a business being “noncore” is anathema in Japan.

Selling to a foreign private equity firm is even more controversial. It has been only a year since K.K.R. was rebuffed by the establishment in its attempt to acquire Renesas, a troubled Japanese chip maker.

Yet despite being Japan’s largest corporate employer, Panasonic is under pressure. Its electronics business is wobbling, and last year, it canceled its dividend for the first time in 60 years.

Panasonic is keeping a 20 percent stake in the health care arm, presumably as insurance in case K.K.R. walks off with a big profit. Other big Japanese groups thinking about how best to allocate capital must now be considering similar moves.

On the face of it, the $4 billion takeover of Grohe, the bathroom fixture maker based in Germany, by the Japanese buildings materials company Lixil, looks less surprising. After all, Japanese companies have been buying overseas for years as they seek sources of growth to counteract the declining population at home. Moreover Lixil, whose chief executive, Yoshiaki Fujimori, previously worked at General Electric, has made many acquisitions.

What’s novel about the Grohe takeover is its use of leverage. Lixil is swallowing a company with an enterprise value half its own without issuing any new equity.

It has pulled off this trick by drafting in the Development Bank of Japan, a state-owned lender, as an equity partner. By parking half of Grohe with the Development Bank of Japan, Lixil keeps the target’s debt off its balance sheet. It also avoids consolidating the good will on the deal, which Japanese accounting rules would require it to amortize, thereby reducing its earnings.

Such aggressive financial engineering may be questionable, especially with the support of a state-owned institution with super-low rates of return. Nevertheless, it’s a sign that Japanese companies can hold their heads high when it comes to devising creative corporate structures.

Whether Japan’s taboo-busting deals will work out for shareholders â€" the ultimate key to their success â€" is hard to say. Cross-border mergers are tricky, and Tokyo Electron and Applied Materials have offered little detail about how and when they will actually integrate their businesses. K.K.R.’s private equity rivals will be watching closely to see whether the buyout firm has the freedom it needs to overhaul the hodge-podge of unrelated business that compose Panasonic’s health care division. And Lixil’s bet will only be declared a victory when it pays down some of Grohe’s debt and fully absorbs the group on its balance sheet.

Moreover, some of Japan Inc.’s bigger seemingly inviolable rules also remain in force. Even though the domestic market continues to shrink, Japanese companies still seem unwilling to merge with one another. That is why Japan, despite having just 40 percent of the population of the United States, still has many more car makers, brewers and electronics manufacturers.

Nevertheless, the recent breaking of corporate taboos in three novel deals suggests that Japanese executives are beginning to follow the lead unleashed by Prime Minister Shinzo Abe’s economic policies. After years of excessive caution, a shift away from some shibboleths of the past is good news for Japanese capitalism.

Peter Thal Larsen is Asia editor at Reuters Breakingviews. For more independent commentary and analysis, visit breakingviews.com.

Inquiry Into Illicit Online Marketplace Extends to Britain

LONDON â€" Four men arrested in Britain on drug charges are being investigated over their suspected ties to Silk Road, an online marketplace that has been linked to narcotics sales and other illegal activity, British officials said Tuesday.

The National Crime Agency of Britain said that it took four men into custody last week hours after the arrest in San Francisco of Ross Ulbricht, who American authorities say was the owner of Silk Road. Mr. Ulbricht, 29, was charged last week with conspiracy to commit narcotics trafficking, computer hacking and other charges.

The arrests represent the first major initiative by the N.C.A., a newly formed national police agency that the British government hopes will serve as the equivalent to the F.B.I. in the United States. N.C.A. officials say they are planning a wider campaign to target crime in the dark corners of the Internet.

“These arrests send a clear message to criminals; the hidden Internet isn’t hidden and your anonymous activity isn’t anonymous,” said Keith Bristow, the N.C.A.’s director general. “We know where you are, what you are doing and we will catch you.”

The four men were taken into custody after N.C.A. officers, working closely with American law enforcement, identified several people they believed to be “significant users” of Silk Road, British police said. Their identities weren’t released on Tuesday.

In documents last week, American prosecutors in New York said Silk Road was used to sell a variety of illegal drugs, including ecstasy, marijuana and heroin. Users also anonymously offered computer hacking services, forged documents and pirated movies, authorities in the United States said.

The only form of payment accepted on the Web site was bitcoins, a virtual currency. American officials seized about 26,000 bitcoins valued at about $3.6 million last week and shut down the online marketplace.

A public defender who represented Mr. Ulbricht at a hearing in San Francisco last week after his arrest has declined to comment on the case.

JPMorgan Names New Chief Information Officer

NEW YORK--(BUSINESS WIRE)--JPMorgan Chase & Co. (NYSE:JPM) announced today it has appointed Dana Deasy as the company’s new Chief Information Officer (CIO), effective in December. In this role, Mr. Deasy will be responsible for the firm’s technology systems and infrastructure across all of its business globally.

Mr. Deasy will be joining JPMorgan Chase from BP, the $400 billion global energy company, where he was Chief Information Officer and Group Vice President responsible for global information technology, procurement and global real estate. Earlier in his career, Mr. Deasy served as CIO for General Motors North America, Tyco International and Siemens Corporation Americas.

Mike Ashworth, who served as interim CIO over the past several months, has been named Deputy CIO for the company and Chief Information Officer for the firm’s leading Consumer & Community Banking business. Mr. Ashworth is a recognized leader who has held a number of senior leadership positions at the firm over his 27-year career there, including as head of Global Technology Infrastructure and as CIO for the Investment Bank.

“Technology fuels almost every aspect of our company and is core to the value proposition we offer our customers, clients and communities,” said Paul Compton, Chief Administrative Officer for JPMorgan Chase. “Dana Deasy is an extraordinarily talented executive with outstanding experience, and we are pleased he’ll be leading this critically important role for our company.”

Gordon Smith, CEO of the company’s consumer businesses, added, “We’re also very fortunate that someone with Mike Ashworth’s deep experience across our company will be responsible for delivering technology solutions to our 52 million consumer and small business customers across the United States. Our customers have come to expect the best solutions from Chase, and Mike will help ensure we deliver on that promise.”

JPMorgan Chase & Co. (NYSE:JPM) is a leading global financial services firm with assets of $2.4 trillion and operations worldwide. The firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, asset management and private equity. A component of the Dow Jones Industrial Average, JPMorgan Chase & Co. serves millions of consumers in the United States and many of the world’s most prominent corporate, institutional and government clients under its J.P. Morgan and Chase brands. Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com

Britain Expands Program to Spur Home Purchases

LONDONâ€"The British government on Tuesday began the second phase of a new program aimed at igniting home buying, in part by guaranteeing up to 15 percent of mortgage loans.

Consumers have complained that they can’t afford to purchase new homes or apartments in Britain because many banks have required a 20 percent down payment since the financial crisis.

The downturn in Britain’s housing market after the financial crisis wasn’t as severe as the United States or other parts of Europe. But the rapid increase in housing prices in London and other hotspots in recent years has made it difficult for first-time buyers to scrape together enough in savings for hefty down payments currently required for home and apartment purchases.

“Help to Buy is going to make the dream of home ownership a reality for many who would otherwise have been shut out,” Mr. Cameron said in a statement. “This goes right to the heart of my vision for Britain-a country where everyone who works hard can get on in life.”

Some lawmakers have objected to the plan. On Tuesday, a Parliament committee issued a report saying the program may lead to higher home prices in Britain in “the short-to-medium term.” The amount of residential housing being put up for sale is lagging demand in Britain, which could result in “further upward pressure in prices over the coming months,” said Peter Bolton King, global residential director for the Royal Institute of Chartered Surveyors.

The Parliament panel, called the Commons Treasury select committee, also expressed concern that taxpayers may be forced to shoulder losses for lenders and that the program, designed to be temporary, could become permanent.

Consumers in Britain can begin applying for the down payment loans through units of Royal Bank of Scotland on Tuesday, and other banks will soon join the program. However, it can take several months for the mortgage process to be completed.

The British government will guarantee up to 15 percent of those loans on homes worth up to £600,000 ($964,200), beginning in January. Under the program, the buyer would, in essence, put 5 percent down and the government would guarantee the next 15 percent, as if the buyer put down a 20 percent down payment.

In the first phase of the £12 billion program, the British government agreed to loan first-time buyers and other buyers of new construction homes up to 20 percent of the purchase price of a home valued at £600,000 or less. About 15,000 people have taken advantage of the government-lending portion of the program.

The second, expanded phase of the initiative would include commercial banks offering similar down payment loans. Lloyds Banking Group and Royal Bank of Scotland, which both received a government bailout during the financial crisis, have agreed to offer low interest-rate loans to qualified consumers. HSBC, Aldermore Bank and Virgin Money, part of Sir Richard Branson’s Virgin empire, also have announced plans to participate.

“We want to support our home owning and home buying customers and recognize that particularly for first time buyers, building the necessary deposit can be a real challenge,” said Antonio Simoes, chief executive of HSBC’s U.K. bank, in a statement.

In a separate report Tuesday, the Royal Institution of Chartered Surveyors said that residential home sales in Britain nearly hit a four-year high in September. Prices in September increased in every part of the country, except Britain’s North East, according to the group. Home prices have steadily increased in Britain since Easter.

Average housing prices in England and Wales rose 1.3 percent over the previous year to £164,654 in August, according to the most recent data available from the Land Registry, a government body that tracks property sales.

However, prices were up annually 7.1 percent to £389,066 in London in August.