Prime property regains peak prices as supply dwindles
The supply of prime London property is drying up, with available stock down 50% on a year ago, forcing buyers to to pay increasingly high prices. Gazumping has returned to the market.
Sales volumes rocketed 234% compared to last August, and residential prices in prime central London grew by 1% last month - the fifth consecutive monthly rise, according to international agent Knight Frank's most recent monthly report.
But prime properties are becoming more expensive because there are so few coming to the market. Far from being signs of a recovery, this results from a severe lack of new instructions according to property consultant Jeremy McGivern.
He said: "The London property market is by no means out of the woods. There is such a low number of sales it is impossible to draw any conclusions. A rise in prices is only due to the massive undersupply."
James Pace, partner and head of Knight Frank in London's Chelsea district said: “Over the last two months, we have seen multiple bids on almost every sale we have agreed. Gazumping is back and in some isolated cases, peak prices are being achieved again."
He added: "We recently sold a property in Redcliffe Road (off the Fulham Road) for a record price, a similar property on the same street sold in December 2008 for 15% lower. This price growth has been focused on quality. Property that is well-presented, in a good location and priced correctly will continue to do well. Property that is compromised will lag behind.”
He said that whilst sales volumes during the last three months are up by 65% year on year, stock levels are 50% lower than he would expect at this time of year.
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