Central London Property Rallies

A new report by Savills Research has shown that central London residential property prices grew for the first time since they starting sliding in September 2007. Over the past three months, property prices in central London rose by 4.3%.

Partly the rise has been fuelled by property investors believing that the housing market is nearing bottoming out and therefore property bargains can be had. There is also a lack of good quality property on the market so when good properties have a For Sale sign on them, they are being snapped up quickly at close to the asking price. Central London is also perceived as a good area to buy in as it is relatively low risk compared to other major city properties as it is home to so much business and there will always be a good supply of renters who are professionals.

However experts are keen to warn that this doesn’t mean the housing market is about to start rocketing again. Mortgages are still thin on the ground and many are struggling to find lenders willing to lend them the money to fund property purchases. Many of the current property buyers in central London are property investors and cash buyers, both of whom make up just a tiny proportion of property buyers as a whole. The housing market will not start to free up until mortgage lending is freed up to the masses.

However the increase in property prices in the central London area should inject some confidence into the property market and this may mean that the housing market in the UK may start to slowly start its recovery over the next few months.

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