London sales of £1m-plus homes leap

Published 29th Aug 2009

The number of homes sold for more than £1m in London soared in August as buyer confidence returned on the back of a fifth successive month of rising prices.

Sales of such prime London homes rose by 234 per cent this month compared to last year, according to Knight Frank, the upmarket property consultancy, reflecting both the depth of the slump last summer and a significant recent increase in activity.

Sales in August were also 90 per cent higher than January 2008, near the peak of the prime London market, and agents say turnover is returning to normal after more than a year during which transactions dried up.

Savills, a rival property agent, also recorded a strong surge in sales in the second quarter, based around the recovering market in London and the south-east.

Other parts of the country have not seen a similar surge in volumes but prices are stabilising more broadly.

The Land Registry on Friday said that prices in England and Wales rose by 1.7 per cent in July, the biggest monthly leap for five years, although prices were still 11.7 per cent lower compared with a year ago.

The Nationwide building society earlier this week said prices rose by 1.6 per cent in August.

But agents warn this surge in sales could prove short-lived as the number of prime homes dwindles in a market already constrained by limited supply.

Liam Bailey, head of research at Knight Frank, said the rise in sales volumes in prime property reflected the increase in demand from buyers returning to the market at what some hope to be a low point in prices, as well as greater confidence in the economy more generally.

This demand was soaking up the still short supply of housing on the market, but the agent’s record of future sales suggested numbers could fall sharply once these deals were finalised.

Recent examples of sales at Knight Frank showed how prices had slowed for properties that had been on the books for some time.

A house at Capstan Court in east London was first advertised more than a year ago at £565,000 and is now under offer in excess of the latest asking price of £515,000.

A nearby property at New Crane Wharf was on the market since May last year, first at £560,000 – it is now under offer at £535,000.

Source: ' FT '

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