Big rise in hotspot homes on market

Figures show estate agents covering desirable central London areas and traditionally expensive suburbs have 42 per cent more properties for sale than they did in May last year.

Experts say this is because owners who have been considering selling are anxious to get their homes on the market in advance of the predicted property price crash.

Others are City workers who have lost their jobs or whose cashflow has been constricted by reductions in annual bonus payments.

But prospective buyers are either waiting for bargains or unable to raise mortgages because of the credit crunch, resulting in a property sale "stand-off".

This has led to prices at the top end of the London housing market beginning to falter for the first time.

Data from agents' website Primelocation shows asking prices in some of London's most expensive areas fell for the first time in the past few weeks. The average reduction is only 0.6 per cent but it is occurring in neighbourhoods that last year saw prices surging by four per cent in a single month.

Mark Milner of Primelocation said: "Asking prices in prime London have held up until now, with cash-rich buyers keeping average prices buoyant.

"More recently, however, the reluctance of sellers to reduce asking prices in a difficult market, coupled with buyers holding out for further price falls before transacting, has led to something of a stand-off."

According to Primelocation, the average asking price in central London is now £1,952,805 - still 16.9 per cent higher than a year ago.

The average asking price in Fulham and Battersea is £887,131, only five per cent higher than a year ago and down 1.1 per cent since last month.

Hampstead and St John's Wood prices are 8.3 per cent up on a year ago at an average £1,472,345, with little change month on month.