Three bedroom houses and four + bedroom houses in Central London have actually increased in average minimum price over the course of September 2008 to September 2009, and are almost back at the same levels as in April 2008.
The average UK home rose in value by 0.01 % from September 2008 to September 2009, (Nationwide). Three bedroom houses and four+ bedroom houses in central London rose by 7 and 13% respectively in the same period (Winkworth). Taking into account the price decreases from September 2008 to the beginning of 2009, an overall rise in price signifies significant recovery in the central London market.
In central London, property has always been in short supply, and this is now helping to push prices up. London is a sought-after location and so demand will always be high, stemmed by the lack of stock available. Alex Thomson, Director of Winkworth Notting Hill said: "A severe shortage of stock continues to underpin the market recovery. Vendors are disinclined to sell for two principle reasons: they still incorrectly believe it is a poor time to sell; and low interest rates enable them to wait."
Cash buyers have dominated the central London market since the beginning of the year. These include buyers looking to capitalise on their comparative advantage over those needing financing, buyers whose money earns nothing in the bank, or buyers who are sitting on funds they would rather not re-invest in other assets just yet.
London is certainly seeing a greater recovery than many other cities, although this has in most cases followed a steeper fall too, with peak to trough falls in the region of 35% in Notting Hill, for example. The sentiment of the property market has been self perpetuated with buyers reassured by other competing purchasers.
Ian Fraser, Franchisee of Winkworth Islington said: "The central London market appears to have made a startling recovery over the last few months. Properties were selling at 25 – 30% below peak prices in the autumn of last year. That figure is now less than 10% away from the previous top of the market for better quality stock. We have registered far more buyers over the last four months than we did even in 2006 or 2007."
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