The latest survey of property prices in the capital from London estate agency, Felicity J Lord, reports that flat prices have increased by an average of 1.4% in February across Canary Wharf, Shad Thames, Wapping and Bow.

Prices have increased this month due to a jump in demand coupled with a shortage of stock, boosting the average flat price to £288,263.

Shortage of stock

Estate agents across the city have witnessed a surge in demand this month, as buyers come back to the market with a vengeance.

The increase in demand has occurred as a direct result of growing confidence in the London market and city bonuses finding their way into bricks and mortar. This combined with a decrease in the number of properties for sale of approximately 7% has led to the average price of a property creeping up steadily since the start of the year.

As a result of the lack of supply and renewed buyer confidence, buyers have become less price sensitive over the past month and properties are selling nearer the asking price.

Properties have also been selling more quickly, and discounts on asking price have decreased to an average of 4.4%, down from a high of 5.2% in November 2005.

Darren Box, managing director of Felicity J Lord commented: "London has been leading the revival across the country since the New Year."

"After a period of steadily falling prices, the market has turned and the lack of suitable properties for sale, coupled with growing demand from city workers and investors, has acted as a real boost to prices."