Prime London prices have risen more than expected due to the influx of overseas buyers and the imbalance between supply and demand, according to The Buying Solution's London market comment.
The key points of The Buying Solution's London market comment are:
- Prime London property prices have risen around 10-12 per cent since March 2009, due to supply/demand imbalances and the impact of overseas buyers.
- The early 2010 property market is likely to be quiet in the run up to the general election.
- There is around 25-50 per cent less rental property on the market compared to a year ago, which is forcing prices up and leaving less room for negotiation.
Cliff Gardiner, partner in The Buying Solution's London office, says: "At the beginning of this year, nobody would have predicted that prices would rise as much as 10-12 per cent in prime London. As such, predicting 2010 is going to be equally as difficult. Will the influx of foreign money continue and the limited supply of new properties coming on to the market create another 'mini bubble'?
"The spring 2010 market is likely to be delayed due to the forthcoming election. My advice to those who want to purchase property ahead of the election is to be particularly careful about what you buy, especially if buying for the short term.
"Property is not as liquid an asset as it once was and buyers should take considered advice to ensure that they are purchasing in the best area and paying a sensible price.
"UK buyers who do not want to compete against international money are best off looking outside the traditional hotspots for international buyers - Mayfair and Knightsbridge - and opting for Kensington, Notting Hill and Bayswater, for example."
Jemma Scott, head of rental search at The Buying Solution, comments: "The rental market in London has changed significantly again in the last three months, with estate agents reporting 25-50 per cent less property on the market, forcing prices to harden.
"A year ago, rental prices were around 20 per cent off their peak, now it's more like five per cent. However, tenants are still expecting to be able to negotiate hard. This is no longer feasible and tenants have to act quickly in order to secure the property they desire.
"There continues to be demand for family rental properties in prime London, so with stock levels lower than usual, prices are likely to plateaux next year."