Sealed bids make a return to the London property market

Sealed bids and gazumping are once again prominent features of the Central London property market, as the severe shortage of homes for sale drives prices back to 2007 levels.

Property consultants Cluttons estimates that approximately 10% of sales are generating multiple offers and ending in sealed bids, with the vendor often achieving in excess of the full asking price. Properties which are particularly sought-after, such as family houses and large apartments in prominent locations such as Hyde Park, Chelsea and St John's Wood, and those close to good schools in Battersea and Clapham, are achieving in the region of 20 bids per property.

Foreign buyers are still making up a significant proportion of buyers in Central London as they move to take advantage of the weak pound.

James Hyman, Partner for Residential Sales, said:

"The London market is currently in a bubble, driven by pent up demand from buyers and a shortage of property for sale. Sellers' expectations are increasingly high which is reflected in steep asking prices, but buyers are not being put off.

"This situation is likely to be short lived, however, with unemployment still rising and an expected surge in forced sales approaching, as homeowners who bought at the peak of the market with high LTVs find they are unable to remortgage on similar deals. I expect to see the market drop off again in the autumn and urge prospective sellers to act now in order to achieve the best prices we are likely to see for a year."

In September Cluttons marketed a four-storey end of terrace house with a garage, patio garden and roof terrace on the Earl's Court Road, close to Earl's Court and High Street Kensington tube stations. The guide price was £850,000 but multiple interest resulted in sealed bids and the property sold at the end of September for £1,076,000 - 27% over the guide price.