Central London house prices fall but buyers increase

House prices for prime residential property in central London fell by a further 1.6 per cent in March, although the price falls have slowed.

The Knight Frank Prime Central London Index, released today, also recorded the number of properties exchanging during March were 13 per cent higher than February, and 26 per cent higher than March 2008.

Viewing levels had increased by 38 per cent in March, year on year, but the number of new properties coming to the market for the month had fallen by 42 per cent year on year.

The research also found how the rate of price falls had slowed sharply in recent months, with prices down only 6.7 per cent in the first quarter of 2009, compared to 9.4 per cent in the final quarter of 2008.

Liam Bailey, head of residential research at Knight Frank, said: "Prices are still falling across central London, however the evidence is mounting that not only is the rate of decline slowing appreciably, from monthly falls approaching 4 per cent before Christmas to 1.5 per cent and 1.6 per cent in February and March, but also activity in the market has increased noticeably in the last two months.

"The pipeline of new properties which we expect to see coming to the market in April is down 60 per cent over the same period.

"The strongest local market in central London at the current time is Mayfair, where prices appear to have bottomed out in January – prices fell a marginal -0.3 per cent here in March. Mayfair has been a particular beneficiary of the weakness of sterling, with foreign buyers comprising almost 60 per cent of the market."

Richard Cutt, head of Knight Frank Mayfair, added: "The super prime London markets are supply driven and this is particularly the case in Mayfair.

"This has meant that good quality properties in the area have faired well in the recent financial storm and we are now seeing similar levels being achieved on successive sales demonstrating that we are at or very close to the bottom."