Hopes of a recovery in Wandsworth housing market gathered momentum today, after figures showed prices rose sharply in prime suburban areas.

Prices in the Brighter Borough rose by 3.7 per cent in the three months to the end of June, said estate agent Knight Frank.

The rise means prices are now 10 per cent lower than they were a year ago — an improvement on the 14 per cent drop seen in March.

However, much of the increase was due to the lack of housing stock coming on to the market which forced property prices to rise.

Liam Bailey, head of residential research at Knight Frank, said: “We saw last year that the markets which were hit by the biggest price falls were those which traditionally appealed to bankers and City employees.

"When the economy in London began to contract, it was areas like Wandsworth and Fulham which initially took the hit.

“This discounting was overdone, and in fact far from the City economy being down and out, the view is that central London will be one of the first parts of Europe to see a sustained recovery.”

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