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Prime London property market shows signs of life amid price drop

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Prime London property has had a tough year, but there are signs that the slump is easing.

[LONDON] Prime London property has had a tough year, but there are signs that the slump is easing.

The capital's three most expensive boroughs - the City of Westminster, Camden, and Kensington and Chelsea - each saw sales jump by more than 20 per cent in the third quarter, according to a report from LSL Acadata published Monday. The surge indicates that "momentum is returning" to prime central London after a year of tumbling property prices.

"Movement at the top end of the market helps to increase activity all the way down the housing chain," said Acadata's Peter Williams and John Tindale.

Nationally, the report may also be a cause for optimism. While the 0.9 per cent annual gain is the slowest since April 2012, and down from 6.3 per cent a year ago, prices increased in November from the previous month for the first time since March.

The signs of improvement buck a trend of pessimistic reports on housing, particularly regarding London. A survey by the Royal Institution of Chartered Surveyors last week showed a result consistent with no change in prices, while Rightmove Plc said London's home values are likely to fall another 2 per cent in 2018. In the RICS survey, brokers flagged a range of reasons for the stagnation, including Brexit uncertainty, political instability and November's interest-rate increase from the Bank of England.

Even in Acadata's report, the picture isn't entirely rosy. Prices in the Greater London area were down 3 per cent from a year ago in October, with the City of Westminster leading losses with an 18.2 per cent drop. London's market also remains a drag on the UK.

The annual change in prices reported this month would have been 3.3 per cent without the capital and the southeast.