The RICS monthly survey of house prices has reported that house prices in London are defying the slump in property prices experienced in the rest of the country due to the impending increase in stamp duty for properties worth £1m plus.
The report says that a sharp divide has opened up between the capital, where prices are rising, and the rest of the country where prices are falling.
A report in the Daily Telegraph comments that the introduction of a new, higher, stamp duty level of 5% for properties worth £1m +, which is due to come into effect in April this year, is thought to be the main reason, encouraging top end houses to suddenly start selling at their asking price.
The highest rate of stamp duties application to all properties over £500,000 was 4% and the change in rates will add £20,000 to the buying cost of a £1.5m house.
The Telegraph goes on to say that the relatively robuse health of the City, now that bankers' bonuses have returned, is another factor allowing high-end London property prices to defy the economic forces hitting the rest of the country where the lack of easy mortgages and nervous buyers has put the housing market into decline.
RICS reports that in the three months to February, 14% more surveyors in London reported a rise in house prices than a fall.