London’s prime property market made a slight recovery in the second quarter of this year, with prices edging 3.1 per cent higher than the end of 2018.
Property prices returned to levels last seen 12 months ago, indicating that the bottom of the market may have been reached. Sales activity picked up 21.4 per cent up on the previous quarter.
Some sellers are being put off by lower prices, creating a lack of stock in desirable areas and presenting hurdles for would-be buyers.
The number of prime properties on the open market is down 12.5 per cent on last year, according to the latest London Prime Property Index by private bank Coutts.
So-called Gazumping – where a second higher offer is accepted after an initial bid has been approved – is on the rise as competition ramps up among buyers with fewer homes to choose from.
The number of property listings in Kensington, Notting Hill and Holland Park is 25 per cent lower than a year ago.
However, the lack of supply is contributing to the increase in prices seen over the last quarter.
Sales were concentrated in Mayfair and St James’s which saw the biggest price rise of 4.1 per cent, reflecting the appeal of the central location and the lack of stock to meet demand.
Demand for family homes in outer-prime areas such as Hampstead and Wimbledon has remained strong.
Less than a third of homes in those areas are selling at a discount to asking price compared to 47 per cent on average across the capital.
Coutts senior private banker Alex Midha said: “Managing the transaction is very important to ensure all parties are speaking to each other regularly and that the vendor and vendor’s agent are confident that the buyer is credible and proceedable.”