Prime residential property prices in the suburbs of London are rising as demand begins to outstrip supply, according to the latest real estate index.
Prices in areas including Hampstead, Richmond, Wandsworth, Wimbledon and Fulham, rose by 3.7% in the three months to the end of June, the Knight Frank Prime London Suburb House Price Index shows.
This means that the annual price change has improved to -10%, from -14% in March and supply of new property is down by 40% year-on-year, the report also shows.
Overall the number of new buyers is up by 33% year on year and viewing volumes are also up by 23% over the same period. Sales volumes have risen by 38% although they are still 29% below the level they were at in June 2009.
The improved market has had a marginally positive impact on the time taken to sell a property which fell from 70 days to 63 days between March and June. And asking to achieved price ratios have improved slightly to 89% compared to 94% a year earlier.
Liam Bailey, head of residential research at Knight Frank said that the residential market across London is beginning to benefit from stronger trading conditions. And it is the prime suburbs where demand is picking up more strongly than the more affordable areas of the city.
‘We saw last year that the markets which were hit by the biggest price falls were the prime markets, the markets which traditionally appealed to bankers and City employees. When the economy in London began to contract, it was areas like Fulham and Wandsworth which initially took the hit in prices,’ he explained. ‘In the last few months the market reaction has been that this discounting was overdone, and in fact far from the City economy being down and out the view is that the central London economy will be one of the first parts of Europe to see a sustained recovery,. Residential markets where central London’s high earners want to live are the first to see recovery in pricing, demand and supply,’ he added.