Last month, average asking prices increased by 3.1% in prime London areas and by 1.1%, the biggest rise since July 2007, according to figures from a property website.

Prices have climbed to a new record average of £1.26 million in the prime areas of London, with only Holland Park/Notting Hill, Highgate, Islington/Highbury and Putney/East Sheen showing a price drop. In the north west of London, prices shot up by 4.7%

Experts believe a lack of supply of new property is the key factor to the price hikes, with the number of properties listed for sale down 6.8% in February.

In rural areas of the south east, values were up by 2.3% and after a long period of stagnation in Scotland, asking prices have risen by 2.6%. Only the north of England fell by a slight 0.2%.

‘The prime country market has started the year in positive growth, although to a lesser extent than prime London. The south east, and in particular, the Home Counties seem to be enjoying the focus of current demand, allowing prices to outperform the wider market.

‘The very top end of the market is where activity remains the most vigorous and where prices are likely to achieve the greatest gains,’ says Ian Springett of primelocation.com.

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