The JLL prime central London (PCL) sales Index recorded a 3.3% annual increase in residential prices during the first quarter of this year, with prices up 0.6% on the final quarter of 2021.

Sale prices are now 4.7% higher than pre-pandemic in the first quarter of 2020, but there has been a 10% fall in properties on the market now compared with a year ago.

PCL recorded a 7% annual increase in sales according to LonRes, making the first quarter the busiest first quarter in five years.

In the lettings market, the index recorded a 15% annual increase in achieved rents in the first quarter of 2022, the highest annual rise for over a decade.

This follows a 10.4% annual fall a year ago when rents “bottomed out across PCL”. Achieved rents are now 3.1% higher than pre-pandemic, but stock levels are down 77% on March 2021.

Marcus Dixon, director of UK Residential Research at JLL, said: “Two years on from the first lockdown we had hoped that 2022 would bring greater stability, allowing the much-anticipated PCL recovery to progress. Sadly, this hasn’t come to pass, with the war in Ukraine, the ongoing impact of Covid-19 and concerns over the rising cost of living all preying on the minds of households. Yet despite a far from certain year ahead the PCL market has again proved resilient.

“The PCL lettings market starts 2022 in a very different position. In the first quarter of last year we had seen rents fall by more than 10% annually and supply levels were still climbing. But a year on and rents are 15% higher than in the first quarter of 2021 and now exceed their pre-pandemic peak. But there are signs the market is settling and we anticipate annual growth in rents will have peaked in the first quarter. But with supply still below historic levels there could be room for further increases in the coming months too.”