Sellers back in the driving seat in London

The drastic shortage of property for sale in Central London has created a seller's market, says Cluttons, with fierce competition among buyers and an increase in sealed bids.

At the end of last year buyers were rare and sellers were doing everything within their power to wrap them in cotton wool while the sale proceeded - often giving in to last minute gazundering. The market has changed dramatically in the last couple of months, as serious buyers return to the market to find there is a very limited choice of property.

As competition grows, buyers are becoming more anxious to secure viewings as soon as a property comes to market, with viewing levels on the most attractive properties returning to 2007 levels.

James Hyman, Partner for Residential Sales at Cluttons, said:

"The market has definitely turned in the favour of sellers, which is helping to support a stabilisation of prices in the capital. We have had three cases of sealed bids in the last week alone, which have resulted in properties selling for over the asking price. Many of these buyers are frustrated savers who are getting very poor returns from the banks, and are choosing instead to invest in a property for their children, as well as foreign buyers wanting to take advantage of the favourable exchange rate. Others are moving out of rented property seizing the opportunity to buy at more affordable prices and borrow at historically low rates."

The dearth of property for sale has been largely caused by potential sellers deciding against putting their property on the market for fear of failing to secure a mortgage on a new home. Those who work in the financial sector or who are self employed, for example, are more likely to face difficulties securing a mortgage, so have been playing it safe and staying put in their current home with their existing mortgage deal. Potential sellers are also unaware of the current high demand for properties.