Prime central London prices up 3.1%

The average asking price for property in the prime central London market increased by some 3.1 per cent during February.

That is according to the monthly price index from PrimeLocation.com, which finds average growth has now fallen to 13.9 per cent - some way lower than the peak of 32.1 per cent witnessed back in June 2007.

Theses short and longer-term changes have seen the average property price in prime central market is now £1,260,012.

"Despite the uncertainty in the money markets and pessimism surrounding the general economic outlook, the prime London property market continues to produce robust monthly growth in asking prices," said Ian Springett of PrimeLocation.

"While asking prices suffered towards the tailend of 2007 due to the accumulation of record volumes of prime property for sale, stock levels are beginning to recede, increasing the competition for the remaining properties available."

PrimeLocation finds, despite agents handling 55 per cent more properties for sale than 12 months ago, monthly stock levels continue to decline in February 08 - down 6.8 per cent.

"With City bonus money filtering into the market and continuing international demand for the very best properties, the prime property market is standing firm," continued Mr Springett.

"Buyers in the prime property market are much less reliant on mortgage borrowing to transact compared to the mainstream market, where potential buyers continue to be restricted by the significant tightening of lending criteria, forcing many potential vendors and buyers to stay out of the market until more favourable conditions return."

In the letting market average rents increased by three per cent in February, with the average weekly rental value of a prime London property at a new height of £997.

Rental prices are increasing by seven per cent annually, with the highest rents found in central London (£1,237 p/w) and north-west London (£1,148 p/w).

The rural market also appears strong, according to the PrimeLocation research, with price country asking prices up by 1.1 per cent across the UK.

This is the fastest monthly growth since July 2007, and takes annualised growth to 6.9 per cent.

The average price for a prime country property now stands at £530,672; but this varies from £402,770 in Scotland to £647,449 in the south-east.

"Like the prime London property market, the prime country market is continuing to achieve monthly growth in asking prices, despite difficult economic conditions and a subdued mainstream market," explained Mr Springett.

"Since the turn of the year, the build-up of stock has started to reduce to more traditional levels, culminating in a return to positive monthly price growth," he concluded.