Top property prices on the up

London's salubrious property hotspots enjoyed 0.6 per cent price rises during February despite the uncertain economy and falling mortgage approvals.

That is according to figures just released by property agents Frank Knight, which recorded a three-monthly growth rate for London's prime market of 2.8 per cent.

The agents said while mortgage woes weren't always an issue for high-end property buyers, the sector would still welcome further interest rate cuts to provide extra confidence to those with loans.

While the prime market, which refers to properties over £2 million in central London and include areas such as Kensington and Chelsea, was showing a "degree of resolve", it hadn't been entirely unaffected by the recent jitters.

Frank Knight warned, on an annualised basis, the long-term trend was that a continued slowdown would strike, as annual figures were at a rate of 23.8 per cent – a low not seen since summer 2007.

Liam Bailey, head of research at Frank Knight, said the government's decision to amend capital gains tax from 40 per cent down to 18 per cent in April would help underscore modest improvements in currently difficult market conditions.

He added: "Vendors and purchasers alike will be watching this week's monetary policy committee's decision on base rates very carefully.

"While those buying prime property are less reliant on mortgages than those in the wider market, a further cut to base rate would be very well received, especially at a time when mortgage approvals have fallen radically in recent months."