Knight Frank's Prime London Suburb House Price Index Q2 2009 has highlighted a rise in prices across London's prime suburban areas.
Research from Knight Frank shows that prices in London's prime suburbs (including Hampstead, Richmond, Wandsworth, Wimbledon and Fulham) rose by 3.7 per cent in the three months to the end of June. This means that annual price change has improved to -10 per cent, up from -14 per cent in March.
Strong demand and weak supply are acting to push prices higher. Supply of new properties is down by 40 per cent year-on-year and the stock of new properties coming to the market over the next two months is down 42 per cent year-on-year. Meanwhile, new purchasers are up by 33 per cent year-on-year and viewing volumes are up by 23 per cent over the same period.
Sales volumes have risen by 38 per cent year-on-year and the time taken to sell a property has fallen from 70 days to 63 between March and June.
Asking to achieved price ratios have also improved slightly, but are still well below their level a year ago. In June 2009 the average ratio was 89 per cent compared to 94 per cent a year earlier.
Knight Frank's head of residential research, Liam Bailey, commented: "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.
"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."