London housing revives for first time this year

The London housing market saw a marked revival this month as a surge in activity allowed sellers to raise their asking prices, an estate agents' survey showed today.

The average price of a home on the market has jumped by 2.1 per cent over the last four weeks - the biggest increase since the start of the year - according to Rightmove, a property website.

London's increase was the strongest since January's 2.5 per cent jump and followed two months of declines in May and June.

"This could be the first sign of a significant pick-up in the London housing market, with renewed confidence and activity starting to flow through into higher asking prices," said Miles Shipside, commercial director of Rightmove.

The report follows last week's report by the Independent of a garage in north London that sold for £75,000.

The survey, which claims to include more than a third of all homes for sale, showed a more modest 0.4 per cent increase across the country.

This took the annual rate of house price inflation to 13.2 per cent, down from 26.5 per cent at the start of the year and the seventh successive monthly fall.

Mr Shipside said: "House price inflation continues to trend down towards the 10 per cent level, supporting the view that we are seeing a soft landing."

But he said there were significant geographical variations with Greater London, the South East and East Anglia - which performed least well earlier this year - now showing signs of picking up.

"On the other hand, it now seems to be the turn of northern and western regions to weaken," he said.

Mr Shipside said this month's quarter-point cut in interest rates should help boost consumer confidence and spending even if the cut would not have much effect on people's ability to borrow. "At any rate, the market seems to have cast off the spectre of crash," he said.

Rightmove said the number of properties coming off the market exceeded the number coming up for sale for the second month running. It said the volume of activity had picked up and, in the wake of the Bank of England's cut in interest rates, there had been an improvement in confidence.