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Small increase in Prime London property sales values

Meanwhile, prime London sales stock levels fell for the second successive month (-1.43% in June). Central London (-2.53%), South West London (-1.54%) and North West London (-1.19%) recorded the largest falls.

For the fifth successive month annualised sales prices for London decreased – they were 1.90% lower than June 2008.

Central London (-3.18%), South West London (-2.61%), and Islington, City & Docklands (-5.16%) were the most
underperforming regions.

Prime London lettings stock continued to increase, and was 96% higher than this time last year, leading to a further
reduction in weekly rental values. Prices fell for the 15th successive month and were down £8.78 on May.

Andrew Smith, Primelocation.com’s Head of Research, said: "Asking prices in London rose by 0.33% in June, making this the sixth price rise recorded in the past seven months.

"Prices rose most strongly in North West London (2.12%) and West/South West London (1.70%), two areas which also registered significant monthly declines in the amount of property on the market (-1.19% and -1.54% respectively).

"In the London sales market as a whole, supply levels dipped by 1.43% in June and were 3.65% lower than June 2008. Stock levels were at their high point in October 2008, and have fallen by 11.5% since then.

"Fewer properties on the market has come at a time when agents are reporting a rise in the number of buyer enquiries and sales. In June, Hamptons International noted that their London offices had seen ‘double the number and the value of sales so far this year compared to last. Many buyers are complaining about a lack of available stock with the number of properties for sale down 31% yearon-year’.

"Interest from overseas buyers has played an important role in this surge in activity in Prime London. These buyers do not traditionally look far beyond London but their presence in the market has allowed London sellers to turn their attention to regional markets.

"Some evidence of a ripple effect from London can be discerned in the modest month-on-month rise in values in the South East (0.10%) and the South West (0.96%), but other regional markets remained subdued and prices in the Prime Country market fell by 0.07% over the month."

The lettings market continues to see rising stock levels and falling rental values, but this month’s Prime Index provides some evidence that this trend may have run its course.

In June, rental prices fell by 1.12%, making this the 15th successive month of falling rental prices. Stock levels also increased, but the month-on-month rise was the lowest since April 2008 while the year-on-year rise was the lowest since February 2009.

Smith said: "It’s too early to call the bottom of the current rental cycle in the Prime London Lettings market, but this
month’s data does suggest that the wheel is beginning to turn.

"Improved activity and increased demand on the sales side, should encourage this process as accidental landlords take encouragement from improved prospects and re-list their properties for sale. However, it remains to be seen whether the market is sufficiently robust to sustain such a counter-cyclical movement.

"While the weak pound will continue to attract overseas buyers, an improvement in the value of sterling could cut off that source of demand and as a consequence improved access to finance will be needed to bring UK buyers back into the market."

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