Mirroring the National increases, Hometrack's January monthly survey of London property prices reveals average rises of 0.1%. This represents a slight slowdown, following a 0.2% rise in December. However, the January sale figure was a little more buoyant, with the number of sales agreed increasing by 4% compared to January last year.

More significantly the number of London boroughs showing stable or rising prices has risen dramatically from 24 to 31. Only two boroughs have recorded price falls in the January survey: Richmond upon Thames (-0.5%) and Newham (-0.1%). These boroughs are continuing to see a fall back from significant price increases in late 2000 and early in 2001, fuelled by high City bonuses, falling unemployment and rising consumer confidence.

Topping the table of London borough price rises are Lewisham (0.3%); Harrow (0.2%), Havering (0.2%) and Hounslow (0.2%) which offer affordable homes with reasonable commuting distance to central London. The average property price of the 16 boroughs with the highest price rises is £173,600, whereas the average property price of the 16 boroughs with the worst price rises (or falls) is £231,600. Buyers are generally looking more for houses in outer boroughs where properties are more affordable than central London. Prices achieved as a percentage of the asking price at 94% continue to show a recovery (rising from a low of 93.4% in November) but remain short of their peak of 95.9% in June last year.

John Wriglesworth, hometrack's housing economist comments: "Fears of a recession seem to be receeding, and the housing market is getting off to a bright start to the year, even if the same can't be said about the weather! While it is too soon to confirm this recovery is sustainable, low interest rates and the best mortgage deals that have ever been offered are making more and more London homes affordable to many buyers. While there continues to be weakness at the top end of the market (greater than £800,000), such properties represent a very small minority of London-based homes on the market. I am confident that we will see London house prices in general rising through out the year, and making my forecast of 4% for 2002, which is well ahead of annual retail price inflation levels".

January's Hot Spots, Not Spots & Key Reasons:

Hot spots:

• Lewisham (+0.3%) : Located close to the City where prices are much higher, perceived as good value. Boasts some of the finest examples of Georgian houses in London. Also recorded the highest increase in new buyers in London.
• Harrow (+0.2%) : New buyers coming into the market early in the year. Particularly first time buyers, hoping to get in the market before prices rise.
• Havering (+0.2%) : People moving further out into Essex countryside and commuting into London as prices are too attractive to turn down.
• Hounslow (+0.2%) : Affordable, Accessible, with a strong first and second time buyer market.
• Lambeth & Southwark (+0.2%) : Continuing the upswing of South London prices close to the city, and plenty of investment buyers.

Not Spots:

• Richmond-upon-Thames (-0.5%) : The slowdown in the economy has affected the top end of the market and Richmond is the third most expensive London Borough behind Westminster and Chelsea.
• Newham (-0.1%) : One of the fastest growing areas in London experienced the smallest of downturns in terms of property prices; expect this one to bounce back soon.
• Wandsworth (No change) : An area that has risen rapidly in value over the last 3-5 years, has just dipped for the meantime in order to keep sales flowing. Earlsfield remains a popular haunt for young professionals though.