Signs show London residential property market has peaked

AIR is beginning to leak from the London residential property balloon.

Moreover, anecdotal reports indicate that Asian and other foreign buyers are no longer rushing to buy prime London properties following the surge in prices, the jump in sterling in the past year, threats of taxation and the Bank of England's potential anti-bubble moves.

"The UK prime residential market has continued to perform well with year- on-year increases in both volume and value," said Jeremy Helsby, group chief executive of Savills in the estate agent's trading statement last Monday. "(But) we have lately seen some cooling in the prime and super prime central London market."