Property prices in prime areas of London, including Mayfair, Belgravia and Knightsbridge, have seen a slight increase, with buyer activity up too, according to the latest figures from the private bank Coutts.
The bank’s London Prime Property Index revealed a 3.1% increase in house prices since the end of 2018, with sales activity up by 21% on the previous quarter. The rise has returned prices to levels last seen 12 months ago.
Mayfair and St James’s saw the biggest price rise of 4.1%, thanks to the enduring appeal of this central location and competition among buyers for a limited number of properties.
While prices in the sector are still 14.5% lower than their 2014 peak, the rise is leading analysts to suggest that the bottom of the market has been reached.
Falling house prices are believed to have discouraged sellers and the number of homes coming onto the market is 35% lower than in 2014. Among prime properties, the number for sale on the open market is down by 12.5% on last year. This has created high demand, resulting in the recent price rises.
Competition for properties has been so intense that there are reports of a rise in gazumping – where a higher offer is accepted after an initial bid has been approved.
Demand for prime rented property in London also remains strong, with average gross rental yields standing 3.9%. Some of this demand has been fuelled by prospective buyers choosing to rent while the political instability caused by Brexit continues.