London property prices soared to within touching distance of their all-time high in February as demand from cash-rich buyers outstripped supply, a survey has shown.
Asking prices for properties coming onto the market in February increased by 2.5 per cent compared to the previous month, as confidence in the capital’s property market outlook for the coming year continued to rise, according to Rightmove’s House Price Index.
The average price of a newly marketed property in London was £449,252 in February, just one per cent below the all-time high of £450,210 seen in October last year.
Rightmove director Miles Shipside said: “The onset of the spring moving season generally leads to more ambitious pricing of properties coming to market in the early months of the year, partly due to estate agents vying for new seller instructions.
“With the on-going shortage of new sellers, prices will rise where the local market or a particular estate agent is short of a type or style of stock. With a buoyant market track record in 2011, confidence in bricks and mortar in the capital seems set to continue, with ‘seller-power’ twice as strong in London compared to the rest of the UK.”
Average weekly listings are running some 25 per cent lower than pre-credit crunch levels, according to the report, with sellers reluctant to come to the market. New seller numbers were nine per cent below the levels seen this time last year.
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Shipside said: “Upwards price-pressure is likely to be maintained in 2012, especially in the active cash-rich micro-markets with the greatest shortage of new listings. It is likely the next couple of months will see new asking price records in the capital as sellers of the right property in the right place where enough potential buyers have access to funding flex their pricing muscles.”
The biggest rises in asking prices were seen in Richmond-upon-Thames, Kingston-upon-Thames and Wandsworth, indicating that demand for property is particularly strong in the west of London Thames-side area. However, observers in the boroughs have suggested figures for the first three months may present a more accurate picture of property prices in this area.
“While there has been a lot of comment about foreign buyers fuelling central London prices, the boroughs of Richmond, Kingston and Wandsworth are well-off areas where Londoners want to live. They are solid middle to upper-class, and these figures are early indications that some of the heat in the foreign driven central market is spilling over into high demand in these sought-after Thames-side locations,” said Shipside.