Gloomy spring for estate agents as prime London property prices dip

Savills said prime central London prices fell by 1.5 per cent in the first three months of the year, following a dip of two per cent in the last quarter of last year.

Its rival Knight Frank said central London prices were unchanged last month and rose 0.8 per cent in the first three months of the year.

Both reports are in sharp contrast to the era of raging property inflation in central London that ended when the credit crunch took hold. It peaked last year at about 30 per cent a year in areas such as Kensington and Belgravia.

The figures came as research by the Standard revealed few signs of the "spring bounce" that estate agents rely on to kick-start the property market.

May is meant to be the busiest time of year for house-hunters as first-time buyers and investors come out of the winter lull. But in another sign that the credit crunch is hitting the market, buyer numbers were down 30 per cent in many offices over the bank holiday weekend.

Winkworth in Ealing had five buyers over the weekend compared with 32 during the same period last year. Viewings at the office were down by more than 70 per cent on a year ago and sales fell from five to one.

A spokesman for consultants Capital Economics said: "The number of unsold properties on estate agents' books in London is almost 90 per cent higher than it was a year ago.

"Buyer registrations, which normally rise in April and culminate in many viewings over the bank holiday weekend, failed to materialise. The number of viewings required to achieve a sale rose to 14 and properties are now taking an average of more than nine weeks to find a buyer - up from six weeks in the middle of last year."

A spokesman for the Royal Institution of Chartered Surveyors confirmed that sales were down on last year. Jeremy Leaf, who also has two estate agency branches in Finchley, said: "The weekend proved to be only a little more active than previous weeks." Ian Dickson of Winkworth in Shepherd's Bush and Hammersmith said: "The number of people coming through our doors is down by up to 30 per cent and the weekend was very quiet. Selling prices are down by 10-12 per cent but lower-priced properties are selling well."

However, Phil Tennant of Hamptons, said: "We did more viewings this weekend than last year and April was 10 per cent up on last year in terms of activity. We've found seasonality is less important than it used to be. If you're looking for a one- or two- bedroom flat it is not as much of a factor as a family looking to get the children settled in school."

Liam Bailey, head of residential research at Knight Frank, said: "Vendors are becoming more attuned to the more difficult market sentiment, although there is still some over ambitious pricing in the market.

"A year ago average achieved prices hit 102 per cent of asking price, since then the relationship has reversed, with achieved prices only averaging 96 per cent of asking prices - the lowest ratio seen since mid 2004."

At the peak of the market last July central London prices were increasing by four per cent a month.