Hometrack's February monthly survey of London properties reveals that house prices have risen by a whopping great average of 1.7%. This follows last month's much more modest rise of 0.1%, and sharply reverses the declining trend in house prices that occurred in the last six months of last year.

The number of active buyers in the capital has also surged, meaning that they significantly outnumber the sum total of properties registered for sale. If accurately represented, this significant excess of demand in the market suggests that further strong house price rises are in the pipeline for the next few months.

All boroughs exhibited price rises, with Lewisham (3.5%), Hackney (2.9%) and Haringey (2.9%) leading the field. These reasonably central boroughs offer good value for prospective homebuyers seeking reasonably short commuting times to the City or the West End.

At the other end of the scale, the worst performing boroughs were Hillingdon, Hammersmith and Fulham, which all still managed a rise of 0.6% and Bromley which increased by 0.7%. While Hammersmith and Fulham is still seeing the after effect of overinflated prices over the last two years, the modest rises in Hillingdon and Bromley are more to do with their relative lack of accessibility to central London locations.

Top end London boroughs, where prices have been particularly weak over the past year, have also performed strongly this month, with Kensington & Chelsea up 1.1%, City of Westminster up by 2.0% and City of London by 2.2%. Prices achieved as a percentage of asking price rose sharply to 95.2%, rising from a low of 93.4% in November. This is the third successive rise in this measure, and provides further evidence of the rising buyer demand experienced so far this year.

John Wriglesworth, hometrack's housing economist said: "The strong rises in this month's survey suggests that the market is really taking off again in London. All boroughs and all types of properties saw rises, spelling the end to last year's slowdown, which particularly affected the top end of the market. With buyers presently outnumbering the available properties for sale, and with record low mortgage rates set to continue, further strong house price rises in London can be expected. We are revising our London house price inflation forecast for 2002 to 6% (from 4%)".

Hot spots & key reasons

Lewisham (3.5%) - People have once again been drawn to Lewisham, as it is one of the cheaper parts of London. The D.L.R has boosted its popularity with quick commuting to The Docklands. The tube is also being extended from New Cross.

Hackney (2.9%) - A severe lack of stock, with 2-3 bed conversions in high demand, mainly from 1st/2nd time buyers and investors. The tube is being extended to the City (Bishopsgate) which has added to its appeal coupled to its reasonable value.

Haringey (2.9%) - A general "feel good" factor is apparent with this area's diverse mix of people and cultures. 1 bedroom flats have been achieving premium prices, which reflect the increases currently experienced.

Harrow (2.7%) - An abundance of buyers interested in this relatively cheap yet not too distant area to Central London. Overflow from areas like Ealing with good tube links. 1st time buyers and young professional are now moving here.

Islington (2.7%) - Sealed bids have been common, with new applicants in their droves and hell bent on purchasing. Sales have been to owner-occupiers rather than investors, who are worried in case interest rates rise.

Not spots & key reasons Please note that with the exception of Hammersmith and Fulham, all these Boroughs are on the outskirts of London and are commuter belt locations. Traditionally these areas follow a ripple effect from the centre of the city and we expect these areas to experience stronger price rises in the coming months should the London property market continue to rise.

Hammersmith & Fulham (0.6%) - Agents report that prices were slow to pick up from New Year, as cautious buyers are not paying over the odds for property. Hence the third lowest percentage of asking price achieved, smart buyers are bargaining hard!

Hillingdon (0.6%) - Whilst prices have risen, they are not being supported from surrounding areas as they have done recently. Maybe the reasonable prices fuelled the large increase in Sales Agreed.

Bromley (0.7%) - Whilst property prices continue to rise in Bromley, there are yet to see the migration from more expensive areas within London.

Hounslow (0.9%) - After having the second highest price increase in London last month, prices seem to have risen slower than neighbouring boroughs.

Barnet (0.9%) - Experienced to second lowest % of asking price achieved in London (93.6%) just lower than Hammersmith & Fulham, as buyers bargain hard for the right price.

February 2002 Detailed Breakdown of London Borough Housing Market