Prime London property market set for surge in supply?

The Prime London sales market could be set for a surge in supply this autumn, as landlords faced with falling rentals and buoyed by reports of a stabilisation in sale prices, now consider selling up, according to Primelocation.com.

Prime London rentals hit an all time low in July according to the Primelocation.com Prime Index, falling for the sixteenth month in succession. The average weekly rental in Prime London areas was £763.26 in July, down 15.45% annually. In contrast, the Prime London sales market has continued to stabilise, recording marginal price increases month on month throughout 2009 and recording its first annual price increase since January, this month.

Andrew Smith, Head of Research for Primelocation.com, said:

“Prime property landlords have been faced with ever-decreasing rental values over the last year, due to the huge oversupply of rental properties, which have flooded the market – in July Prime London letting stock was up 73% annually. As a result, more are expected to re-consider a return to the sales market this autumn, encouraged by reports that Prime London property prices have begun a tentative recovery.

“While recent reports have suggested that the current lack of supply may be artificially bolstering sale prices in some areas, I am confident that the Prime sales market will hold its own. Traditionally popular pockets, particularly in the South West, such as Wimbledon and Barnes continue to prove robust and this trend is now filtering out to the wider London market. The current demand being reported by agents in Prime London looks to be sufficient to sustain the current prices being achieved, with the Prime London market set to remain stable for the remainder of 2009.”