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Gazumping has returned to the top end of London’s property market, estate agents say, as the number of buyers starts to outstrip houses in some of the capital’s most sought-after areas.

Sealed bids, which estate agents use in periods of high demand to extract the best price from competing buyers, have also been seen for the first time in 18 months.

Furthermore, the number of cash buyers has risen to unusually high levels, agents have reported.

One branch of Chesterton Humberts in central London said 17 out of 18 sales this year had been made in cash. Knight Frank said 45 per cent of sales over £5m in London were made in cash in April, compared with a third typically.

Savills, meanwhile, said the average number of cash buyers climbed to 42 per cent in March, compared with 24 per cent in 2006 and 2007.

Liam Bailey, head of residential research at Knight Frank, said: “There is no question that purely in terms of sales activity, the central London market is unrecognisable from where it was six months ago.”

He said that “after a noticeable absence” there was evidence of gazumping again and the need for sealed bids.

According to the Nationwide house price index for May, prices rose 1.2 per cent rise from April, sending a signal that appears consistent with other surveys showing improving sentiment.

However, Martin Gabhauer, chief economist at Nationwide, warned that the data did not mean prices had bottomed out.

Source: FT

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