Andrew Smith, Primelocation.com's Head of Market Research, comments: "Last month we noted that the recent upturn in asking prices in Prime areas after six months of falling values provided tentative evidence that the market was stabilizing. This third month of rising prices adds further weight to that conclusion."
Agents have reported greater activity in the market for the past three months, particularly from overseas buyers attracted by lower prices and a weak pound and from cash-rich UK buyers keen to buy while the market is still unsteady. Hamptons reported a 12% increase in net sales in London in November. Savills recently noted that prime London properties would now cost 50% less to a new Japanese investor and 40% less to a Hong Kong, Singaporean, Taiwanese, Swiss or Eurozone investor.
"This rise in buyer activity has been mirrored by online activity. Total monthly visitors to Primelocation.com were up 12% year-on-year in January and property views were up by 13%. The non-UK visitor number was up by 9% year on year driven mainly by the Euro zone and US. "
Andrew Smith concludes: "While the recent stabilization is welcome news, it is important to acknowledge that the substantial gains in early 2008 have been eroded and asking prices are only 1.61% (GBP20,547) higher than this time last year.
"With lending levels at an all time low and the general economic outlook still very much on the downside, we expect vendors to remain under pressure to further negotiate on asking prices.
"However, lower interest rates, a weaker pound and a growing sense that the market is edging closer to the perceived low point should encourage an increase in transaction levels and help sustain prices."
