London’s high-end real estate market is showing continuing signs of recovery, according to the latest property index from Coutts. Prime property prices in the city crept up again in the second quarter, leaving them 3.1% higher than they were at the end of last year, said the private bank and wealth manager in last week’s report.
Helping to support prices is a lack of supply and increasing demand. Sales activity was up 21.4% in the second quarter compared to the previous three-month period.
Despite the recent uptick, prime prices are still 14.5% lower than they were in 2014, making high-end properties in the city good value to buyers. But those same low prices are also discouraging sellers from listing their homes. The number of prime properties on the market in London is down 12.5% compared to the same period last year.
“Fewer properties on offer means that competition can be intense among buyers for desirable properties when they come up, and it’s not surprising to see gazumping on the rise,” Katherine O’Shea, of Coutts real estate investment services, said in the report.
Gazumping refers to the unfavorable practice of accepting a higher bid on a property at the last minute despite having already accepted a verbal offer.
Prime supply has dropped most in the neighborhoods of Kensington, Notting Hill and Holland Park, where inventory across the three areas is down roughly 25% compared to the second quarter in 2018, the report said. It’s up most in the neighborhoods of Kings Cross and Islington, where there has been an almost 15% increase in supply in the same time.