Prime property prices in the capital recovered slightly in the second quarter of 2019, edging up 3.1 per cent when compared to prices at the end of 2018.

Property prices returned to the levels seen 12 months ago, indicating that the UK property market may have reached the bottom and is now bouncing back, with data published by private bank Coutts revealing a 21.4 per cent uptick in sales activity over Q1 2019.

However, in its London Prime Property Index Q2 2019, the bank suggested that some sellers are still wary of lower prices, which are still down considerably compared to the height of the market.

The number of prime properties on the open market is down 12.5 per cent on 2018, with the number of property listings in Kensington, Notting Hill and Holland Park 25 per cent lower than 12 months ago.

Commenting on the lack of stock, Coutts Real Estate Investment Service Katherine O’Shea said: “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. Prime property transactions across London take 169 days on average to conclude – from listing to exchange – leaving plenty of time for gazumping tactics.

A lack of housing stock in desirable areas could be presenting hurdles for would-be buyers. So-called gazumping, the trend for sellers to accept a second, higher offer after an initial bid has been approved, is on the rise as competition increases as a result of fewer homes to choose from.

Coutts senior private banker in the European team Alex Midha added: “Managing the transactions is very important to ensure all parties are speaking to each other regularly and that the vendor and vendor’s agent are confident that the buyer is credible and proceedable.”

The lack of housing stock could be pushing the prices up. Coutts found that sales were concentrated in Mayfair and St James’s, which experience the most significant price rise of 4.1 per cent, reflecting the appeal of a central location and supporting the argument that low stock is driving prices upwards.

The demand for family homes in outer-London prime areas such as Wimbledon and Hampstead has also remained strong. Less than a third of the homes in those areas are selling at a lower price than the asking, compared to 47 per cent on average across the capital.

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