London property market sees fall in prices

The prime sales values in the Capital have decreased for the first time in the last five months according to the Primelocation.com prime index.

The research, released today, shows average asking prices in prime London fell by 0.5 per cent since February, which has been attributed to the increased volume of homes for sale in the area.

March also saw the largest annualised sale price decrease in the history of the index, which now stands at 3.44 per cent lower than the 2008 figure for the month. The west and south-west London saw a huge 10.13 per cent annual fall, as one of the most underperforming regions in the city.

However, the prime country prices saw an average increase of 0.16 per cent, with prices in Scotland increasing the most.

Andrew Smith, Primelocation.com's head of research, said: "The increase in the levels of both supply and demand suggests that consumers are increasingly confident about the current state of the market, a conclusion supported by recent research by Primelocation.com.

"This found that 23 per cent of property searchers believe that the market has already reached its lowest point, while 53 per cent believe prices will be at their lowest between April and December 2009.

"Agents report that buyers are still in a position to haggle, and those buyers who do complete are determined to do so at what they perceive as a discount, hence the continued pressure on asking prices."

In the lettings market stock increased to 128 per cent of its level this time last year, with prices therefore falling for a twelfth successive month.

"Much will depend on how successful the government is in encouraging more liquidity in the financial sector – the Budget this month will be a key event for the housing market," Mr Smith added.