The more optimistic mood in much of the London market is in increasing contrast with the sombre atmosphere elsewhere. Each week more estate agents are convinced that the market is close to its lowest point. This conviction is strongest among those who have experienced previous downturns and are familiar with the signs of an upturn.

Peter Rollings, of Marsh & Parsons, says that gazumping has returned, as a result of a “chronic shortage” of properties for sale. The lack of stock is particularly acute between £1 million and £3 million, where many buyers do not need to borrow a large percentage of the value of a property and are welcome customers at lenders.

Liam Bailey, head of residential research at Knight Frank, talks of “steadily improving picture in the Central London market”. The lack of houses for sale is irritating buyers who assume that they can pick up a bargain. But Bailey also sees evidence of the move to quality that has characterised the upturn in the capital and elsewhere. “People want the best streets, and upper-floor flats, rather than basements, and so on,” he says The opinions of estate agents are supported by the official figures; the Land Registry’s data for April show prices rising by 1.4 per cent. In the prime postcodes, prices were up by 1.6 per cent in May, according to Knight Frank.

One of the tests of the revival of the upper end of the London property market seems set to be the second phase of the Kenwood Place development of 21 flats, in gated grounds, next to Hampstead Heath. The 11 apartments, pictured below, which were launched yesterday, range in price from £1.65 million (two bedrooms) to £6 million (four bedrooms).

Although this is the price bracket where stock for sale is at its most scarce, Glentree Estates, the agent, is not stinting on the praise. In its publicity material, the firm lists Hampstead’s famous residents, such as Dame Judi Dench and Russell Brand.

For buyers who are not swayed by the chance to glimpse a celebrity out buying milk, Glentree extols the comforts of the development, such as the concierge service provided by Harrods, the security, and the swimming pool and spa. The apartments include such standard-issue luxury features as huge windows, underfloor heating and Sub-Zero fridges (refrigeration at its most costly).

Most new-build developers are now routinely offering sometimes huge discounts: Glentree insists that there will be no quiet money-off deals at Kenwood Place. This confidence is based on the appeal of the block, built from Northumberland stone, and the location. Hampstead Heath is an 800-acre untamed open space that contains Kenwood House, with its respected concert programme. Neighbouring Bishops Avenue is seen as the suburban equivalent to Mayfair and Knightsbridge among heads of state and wealthy international businessmen. They were among buyers of the ten apartments in Kenwood Place’s first phase, which sold for between £1.05 million and more than £5 million, with no discounts being given. But the bulk of buyers were locals, either downsizing or looking for a level of comfort not usually provided by the typical home.

In spite of the area’s enduring attractions, values were badly affected in the downturn, falling by about 24 per cent compared with an average decline of 20 per cent in the capital. Prices in Hampstead started to stabilise about three months ago. The average house price in the Kenwood area is now £3 million; homes in Highgate Village are closer to £1 million.

Details: 020-3213 0019, www.kenwoodplace.co.uk

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