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London buyers have broken six-month stalemate

Friday, 16 January 2009 4:40 PM

Cluttons have reported a substantial increase in buyer inquiries, it was announced today.

The London Property market broke its six-month stalemate with many deals being struck at 2006 prices.

Cluttons said London buyers were moving in on lower prices and cheaper loans and deals were being struck in parts of the capital such as Clapham and Chelsea which have seen heavy price falls.

James Hyman, partner for residential sales, said: "We are having the busiest January in five years, with more than a 100 per cent increase in enquiries since the beginning of the year and several sales agreed in the last two weeks alone. Buyers perceive that even if prices drop a bit further they won't get a better opportunity to borrow at these record affordable rates.

"The risk element of property investment is beginning to be removed. Stock market values are down, banks are not offering any form of return and with rental values holding up in London, in many cases it is now once again becoming cheaper to buy than rent."

The quality of buyers is also helping offers to be made and accepted much quicker. Many enquirers now have approved finance, nothing to sell and are looking to move in first quarter of 2009.

However, Mr Hyman warns that the market is still extremely volatile and vendors who have been delaying selling their homes may still lack confidence to go to the market.

He added: "As stock that has been on the market for some months starts to sell, a shortage of supply must not lead agents to get carried away with valuations. The market is still extremely fragile."

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