The average London house price experienced a slight increase of 0.3% in December to £257,568, up from £256,681 in November, data from haart estate agents released this week revealed.

Demand remained strong with unusually high activity levels for the Christmas period buoying the prices. House prices in the capital have risen 9.3% since the start of the year.

Average London current price

Market buoyed by high activity

London house prices have been buoyed by unseasonably high levels of activity in December, with transaction levels 8% higher than last December. The average price increased to £257,568 as the gap between supply and demand showed no signs of diminishing.

Paul Smith, chief executive of haart commented: “The unusually high activity levels experienced by the London market in November have continued well into December, nudging up prices for the fifth month in row.”

“The slight seasonal slowdown in the second half of the month was far less noticeable than in previous years, suggesting that the market is indeed becoming increasingly ‘season-less’ with Christmas and the summer months having less of an impact on activity levels.”

“We are expecting another strong year for the London housing market in 2007 with high activity levels continuing into the first half of the year and prices in the capital predicted to rise by as much as 8%.”

Prime areas targeted by city bonuses

haart predicts that large family homes in access of £800,000 and prestigious one to two bedroom flats are set to be the most sought after properties as workers from the city square mile look to invest their 2006 bonuses.

“We have recorded a 25% increase in registered buyers in prime areas of the capital and expect these registrations to be translated into sales in the first quarter of 2007, pushing prices up as billions of pounds worth of Christmas bonuses are channelled into bricks and mortar,” said Mr Smith. “Properties in prestigious areas such as buy to let hotspots in Canary Wharf and the Olympic Village, and prestigious family homes in Chiswick and Fulham are likely to be the most popular.”

First time buyer level up

The level of first time buyers rose to 27% of the market share in December.

London-wide variations

As prices continued to rise, properties in the Western regions of London saw the highest percentage asking price discounts and overpriced properties were left unsold due to buyers remaining price sensitive. South West London is still the most expensive region with the average price approaching £300,000 at £289,394.