London house prices stage recovery

The fall in the value of homes in the South-East and London during 2001 has come to an end and the market has stabilised, the Royal Institution of Chartered Surveyors said today.

The number of London agents reporting prices falling is now the same as those who see prices rising again - a sure indication the market is gaining some of its buoyancy once again after 11 September.

RICS spokesman Ian Perry said people's uncertainty to buy new property following the terrorist attacks seemed to have diminished in recent months.

He added: "There has obviously been a period of wait and see for potential buyers. People are confident enough in the economic climate to take the decision to start the lengthy process of buying a new home."

North London estate agent Jeremy Leaf said: "The market is proving to be much more resilient than we could have expected.

"Demand for brand new flats and houses is holding up, with smaller one and two-bedroom flats especially popular among both first time buyers and investors. We do not expect to see a great surge in prices within the next few months".

Ken Barnett, of east London Strettons Estate Agents, said: "The market has stabilised since mid-September. With the current low interest rates many people are still keen to buy rather than rent and properties in the £100,000 to £150,000 price range are still attracting good interest.

"Equally we are seeing a continued strong demand from buy-to-let investors, many of whom see property as a good alternative to stock market investments, particularly with the low interest rates.

"Much of the East End still offers good value for money compared with other parts of London."

In south London Michael Day of Connells said: "By November of last year people were starting to put the tragic events of 11 September behind them.

"Although there are fewer buyers, there are also fewer sellers so although prices are not rising, they are not being forced down either.

"The market here is still active, particularly at the middle and lower end, with properties selling reasonably quickly as long as they are valued at the right price.

"People looking to buy at the moment are genuine buyers."