Property prices swing up in London

Prime London properties rose 1.7% in value during June, Knight Frank has reported, while the most expensive houses – costing £10m or more – rose by 1.9%.

The rise in super-prime prices was the first since April 2008.

Between April and June, prices in prime central London rose 3.7% ¬– the strongest rate of three-monthly growth since September 2007.

On an annual basis, prices fell 17.2% in the year to the end of June.

Knight Frank says that prime London prices have been strengthening because of the shortage of property, with availability down by 30% but applicants up by 14%, on a year ago.

The agent also reports that viewing volumes are up by 7% on the year.

Property website Primelocation, however, draws a more subdued picture. It says house prices in London crept up by 0.27% in May and that house prices in the capital are only 2.48% lower than in May last year.

Andrew Smith, Primelocation’s head of research, said: “Asking prices in London registered a modest increase in May. This is the fifth such rise in the past six months and provides further evidence that the year-long trend of rapidly falling prices has stabilised.

“Prices, however, are also related to demand and market sentiment. Our figures show that visitors to Primelocation are up 32% year-on-year and our research indicates that one in five users now believe that prices have already reached their lowest point – hence we are now seeing genuine buyers returning to take advantage of the lower prices.

“This trend has been confirmed by our member agents, several of whom have reported intense competition in prime London areas for a limited supply of properties.

“There have been reports of gazumping and sealed bids as lower prices, the weak pound and rising yields attract buyers and investors back into the market. One agent (Cluttons) has even suggested that sellers now have the upper hand in some prime areas of central London.”