prime London asking prices rise again in January, as the prime Country and mainstream markets continue to struggle

The rather gloomy picture of the prime London property market in November and December 2007, illustrated by the Primelocation.com House Price Index, reflected a mood of caution from buyers alongside a glut of potential sellers attempting to achieve a sale before prices declined even further. This difficult combination led to a fall in prices and a reduction in transaction levels. However, the start of 2008 has already witnessed a significant change in the stand-off between buyers and sellers.

The volume of property for sale across prime London has plummeted, down 10.7% in just one month, as potential sellers decide to wait for more favourable selling conditions. This double-digit fall in the number of properties for sale is the largest single monthly drop since the Index began and the impact has led to a temporary recovery in asking prices. Average asking prices have increased by 3.4% since December. However, it is too early to tell whether the price recovery will be sustained.

Commenting on the performance of the prime London property market, Ian Springett, Chief Executive of Primelocation.com, states, "The resilience of the prime and super-prime property sectors in London has shielded the capital from much of the uncertainty surrounding the mainstream market, where affordability issues and the tightening of lending criteria have led to a stalling market. Many potential vendors have adopted a wait and see approach, perhaps feeling that the current climate is not conducive to a quick sale at the best possible price. Indeed, many have withdrawn their properties from the market in the hope that conditions will improve. This has culminated in a double-digit drop in the volume of properties on the market compared with December. But with fewer properties to choose from and sustained demand from the City investors and international money, asking prices have been pushed upwards".

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