This is the first annual increase for six quarters.
House prices in Prime Central London (PCL) rose by 2.4% over the final three months of 2019 compared to the same period a year earlier, according to the latest prime London sales data by LonRes.
This is the first annual increase for six quarters.
Prices in both prime and prime fringe fell by 4.6% and 0.7% respectively however.
New instructions were down 7% on Q4 2018, and were 41% lower than the peak seen in 2014.
In addition, there are 11% fewer homes on the market now than a year previously.
Transactions across PCL rose by 34% year-on-year, which follows an increase of 18% in Q3 2019.
The number of PCL homes sold at £5m or more increased by 74% in Q4 2019 compared with the same period a year earlier.
This is the highest number of sales in this price bracket since 2016.
The LonRes Agent Survey found that a majority of respondents (98%) felt more confident about the health of their market post-election.
A total of 69% of agents expect prices to be higher in 2020, whilst just 5% expected further declines.
In the survey, 89% of agents expected transactions to rise in 2020.
Marcus Dixon, head of research at LonRes, said: “The fortunes of the PCL sales market began to turn in Q3 2019 and the announcement of a General Election did little to derail momentum over the fourth quarter of the year.
“In PCL both pre and post-election activity increased, with the market at its busiest for three years.
"Outside Central London the market was quieter, albeit with volumes still higher than in 2018.
“A positive shift in sentiment resulted in more new buyer registrations and an increase in the number of properties going under offer, which continued into the new year.
"The latest figures suggest the number of properties under offer in PCL in January is 80% higher than at the same point a year ago and 24% up across the LonRes wider prime catchment."
In the rental market, rents rose by 3.5% year-on-year in PCL, with prime fringe recording a 7.2% increase.
The number of homes listed to rent in Q4 2019 was down by 12% in PCL, however 17% of respondents in the survey saying they had seen new instructions rise in their area over Q3 2019.
A majority (82%) of agents surveyed noted the lack of one-bedroom properties reaching the market.
In 2019, new lets agreed across PCL fell by 9% compared to figures recorded in 2018, with 8% fewer lets agreed in the same time frame.
The number of properties let for less than £1,000 per week fell by 11% over the same period.
Dixon added: “For lettings, a shortage of stock continues to support rents.
"Rents rose 3.5% in the final three months of the year – the ninth consecutive quarter.
“Looking ahead, with optimism returning to the prime market, agents have started a new decade with renewed vigor and a positive outlook on prices, rents and activity.
"This is a view we share and with buyers looking more favourably at the prime market there is an opportunity to unlock some of the significant pent-up demand which we have seen building over the last five years.
“But there are a few unknowns which could prove a curveball over the coming year.
"We are still unsure how well the economy will react to the next stage of Brexit negotiations or if the March budget will benefit or hinder the recovery in Central London."
