The shortage of stock for sale in the capital is creating a supply/demand imbalance, with rising demand from buyers now keen to secure a home at the best possible price as the market improves. Consequently, sellers are currently achieving offers typically within 2% of the asking price - a far cry from the 30% discounts being demanded by some buyers a year ago. The viewing to offer ratio is also high, with one in four viewings in July resulting in an offer being made.
James Hyman, partner for residential sales at Cluttons, said: "Sellers are being pleasantly surprised by the speed at which they are selling and the price levels being achieved, as the shortage of stock in London drives the market upwards.
"This window of opportunity is unlikely to last, however, as the large number of people who bought at the peak of the market come to the end of two year fixed and tracker-rate mortgage deals over the next couple of months. Many will struggle to refinance at a rate they can afford, due to the loss of equity in their homes and the stricter LTV criteria of lenders, which will force them to sell and bring a surge of new property to the market. As a result we could see another price dip of 5% in the autumn."
