Price rises lift recovery hope in capital’s housing market

Hopes of a recovery in the London housing market gathered momentum today, after figures showed prices rose sharply in prime suburban areas.

Prices in areas such as Hampstead, Richmond, Wandsworth, Wimbledon and Fulham rose by 3.7% in the three months to the end of June, says estate agent Knight Frank.

The rise means prices are now 10% lower than they were a year ago — an improvement on the 14% drop seen in March.

However, much of the increase was due to the lack of housing stock coming on to the market which forced property prices to rise.

Liam Bailey, head of residential research at Knight Frank, said: "We saw last year that the markets which were hit by the biggest price falls were those which traditionally appealed to bankers and City employees. When the economy in London began to contract, it was areas like Wandsworth and Fulham which initially took the hit.

"This discounting was overdone, and in fact far from the City economy being down and out, the view is that central London will be one of the first parts of Europe to see a sustained recovery."