Newly confident London homeowners are continuing to put up their asking prices, responding to the surge in demand from buyers.
Latest figures from Rightmove show asking prices in the capital up by 2.4 per cent so far this month compared with the same period last year, pushing the average to £629,000.
And for the first time in 16 months there was a rise in the number of people putting their homes up for sale, with a 1.6 per cent increase in the number of newly marketed properties compared to a year ago.
“Owners coming to market this spring face the best selling prospects for several years, with good demand for the right properties at the right prices,” says Rightmove’s Miles Shipside.
The return of confidence in the market following December’s decisive general election result also saw the number of sales agreed rise by 26.4 per cent compared with February last year, when buyer activity was at a particularly low ebb.
Shipside predicts that buyer momentum is likely to build further in coming months: “After three-and-a-half years of Brexit uncertainty, dither and delay, many now seem to feel that 2020 will be their year to move.”
However, some industry insiders warn that house prices are likely to flatten again towards the end of the year as Brexit negotiations ramp up again to hit the deadline to agree a trade deal with the European Union.
“I would expect any house price rises we’ve seen in January to flatten by the latter part of the year, as attention will inevitably turn to ‘Deal or No Deal’.
"Trade negotiations will inevitably affect market confidence – both in attracting foreign investors and housebuilders who rely on European materials,” says Edward Heaton of property search and buying advisers, Heaton & Partners.
Rightmove’s Shipside cautions: “Sellers should be careful not to get carried away with their pricing as this is still a price-sensitive market with stretched buyer affordability.
"Those who overprice risk missing out on the window of increased activity that could run at least until we approach the next Brexit deadline at the end of the year.”
Where are house prices rising most?
All but five London boroughs saw asking prices either rise or stay flat year-on-year. Of the five highest rising boroughs, four were in south London, with Lambeth seeing the greatest annual increase in asking prices, up 7.7 per cent to £648,000.
Three neighbouring south-west London boroughs were the next highest risers with prices in Sutton up 7.1 per cent to £471,200; Kingston upon Thames up 4.6 per cent to £626,000, and Merton house prices up 4.6 per cent to £621,500.
Prices in London’s most expensive borough are also seeing a February boost, suggesting that the post-election appetite for trophy properties in the capital is still strong.
Asking prices in Kensington & Chelsea rose to £1,567,000, an increase of three per cent, after several reports of a surge in demand for homes in prime London at the end of last year.
However, once again, experts note that buyer demand at the top of the market is likely to be short-lived with increased property taxes for overseas buyers one policy trailed in next month’s Budget.