London house prices surge to the brink of an all-time high

Values across parts of the capital have sprung back from the recessionary slump astonishingly quickly and are still rising, according to agents.

The average is now three per cent off the all-time high of £352,869 recorded by the Land Registry in January 2008.

Trevor Abrahamsohn of agents Glentree International said: "They don't ring a bell as you pass a previous high but if they did it would be ringing now."

In three boroughs, Kensington and Chelsea, Westminster and Camden, average prices are already above their boom-time peaks and in two others, Islington and Hammersmith & Fulham, are just a few hundred pounds adrift.

Agents say more rises of five to 10% can be expected this year. In Kensington and Chelsea an increase of 10% would see the average price top the £1 million mark for the first time.

The trend has also been seen far beyond the hot-spots of central London and the banker "bonus belt". The Land Registry figures show that prices in suburban Barnet are within one per cent of their peak, Southwark two per cent and Hounslow three per cent.

Peter Rollings, managing director of the Marsh & Parsons agency, said the long-term resilience of London's property market should never be under-
estimated. He added: "Our offices report that every region is having an incredibly strong start to the year."

The family homes market has been particularly strong, especially south of the river, he said. The best-performing area last year was Battersea, with a 13% rise.

The revival has been fuelled by record low interest rates of 0.5%, a smaller than expected rise in unemployment, an acute shortage of homes for sale and, in central London, unprecedented numbers of foreign buyers. Dominic Agace, chief executive of the Winkworth agency, said: "The speed of the bounce-back has been amazing, far more rapid than people thought."

But Ed Mead, of agents Douglas & Gordon, said: "What we have is a scaled-down sellers' market but it's not a real market due to the lack of supply.

"If we get a series of rate rises a lot of people who have been sitting on their hands for 23 months will be stirred out of their torpor and think, 'I'd better sell now while the market is still there'."