The latest edition of a monthly property report shows that residential rents in prime central London fell by 0.2% in January and are now 0.6% below their September 2011 peak.

However, estate agent Knight Frank’s Prime Central London Rental Index for January 2012 also finds that, despite recent falls, residential rents are around 7% higher than they were a year ago.

The key drivers of weaker residential rental performance in central London are, says Knight Frank, job losses in the City of London and, ultimately, affordability for tenants.

Liam Bailey, head of residential research at Knight Frank, says, “Rental falls in winter are not uncommon; the employment market is quieter, and fewer people are typically looking to move to new positions.

The January 2012 edition of the Halifax’s monthly index of house prices shows an underlying weakness in growth, despite price rises of 0.6% in January.

Key findings:

• House prices in the three months to January were 0.9% lower than in the preceding three months. This was the fourth consecutive month that this measure of the underlying trend has been slightly negative
• On a monthly basis, house prices increased by 0.6% in January. This was the second rise in the past six months, and the first since October
• Prices in the three months to January were 1.8% lower than in the same period a year earlier. This measure of the annual rate has edged lower in the last two months, from -1.0% in November, but is still well above the recent low point of -4.2% in May 2011
• Overall, house prices have changed little in the past eight months. The UK average price in January, at £160,907, was very similar to that in May 2011 (£161,039)

The latest edition of Hometrack’s monthly house-price index shows a slow start to the year, with an extension of the seasonal slowdown and weak consumer confidence.

Both buyer registrations and sales have fallen, and the underlying trend, says Hometrack, is one of tightening supply and weakening demand.

The supply of homes for sale has contracted by 7% over the last six months – its greatest contraction since 2009.

Nationally, house prices have not posted a month-on-month increase since June 2010. A small rise in London prices during January offsets falls in other regions – a trend that, Hometrack believes, looks set to continue throughout 2012 as the Olympics focus the eyes of the world on London, and overseas buyers, in the midst of global uncertainty, continue to consider London a safe haven.

The price of prime central London residential property rose overall by 0.9% in January and will continue to increase during 2012, according to new research. Annual growth now stands at 11.9%, with prices having risen 42% since their post-Lehman low in March 2009.

The newly published research, by estate agent Knight Frank, found that prices for prime property in the City and City Fringe areas rose by an average of 0.8% across the month. This latest rise pushed the three-month rate of growth to 2.7%, the highest rate since July 2011

Liam Bailey, Knight Frank's head of residential research, said, "The strength of London's luxury sector, against a backdrop of economic difficulties both domestically and globally, has surprised many over the past year.

"Ironically, economic and even political turmoil have provided the impetus for growth, with a sharp growth in investors looking for a safe-haven location for at least part of their wealth portfolio.

Today’s news that homeowners whose properties are at greatest risk of flooding may struggle to obtain insurance when an agreement between the Government and insurers comes to an end in 2013 has been greeted with concern across the property industry.

The Association of British Insurers believes that up to 200,000 homes may be affected, and highlighted Boston and Skegness, in Lincolnshire, and the Vale of Clwyd, in Wales, as the areas most at risk.

Known as the Statement of Principles, the agreement between the Department for Environment, Food and Rural Affairs (DEFRA) and the insurance industry guarantees cover to businesses and households at risk of flooding. DEFRA has announced that it wants more funding to come from local residents and businesses.

At the same time, members of the influential House of Commons Public Accounts Committee (PAC) have warned that funding to maintain and improve flood defences may not be adequate in years to come. The committee was sceptical that households and businesses would be able to make up the shortfall caused by government spending cuts, and warned that the proposed system would not provide sufficient certainty to property investors – and insurers – that the risk of flooding was being managed.

International buyers bought 40% of estate agent Knight Frank's prime stock in the city of Oxford during 2011. The company attribues this to Oxford's reputation as a cultural hub, its thriving technology sector, the quality of the education on offer there, and the lure of its university.

Damian Gray, partner at Knight Frank and head of the Oxford office, says, "London is not the only city to see a dramatic influx of foreign buyers. The UK is still internationally perceived to be a safe economy, and, combined with a weak sterling, this has led to a significant increase in foreign buyers in Oxford over the last year.

"Providing an interpreter is now part of our weekly business, with overseas buyers becoming extremely focused. If they see something they like and it adds up, they make very fast decisions, and look to close a deal quickly, with little borrowing."

The recent Eurozone sovereign debt crisis has resulted in the reduction of the value of the single currency, providing property buyers from outside the zone – including the British – with over 8% more for their money than if they were buying euros in July last year, according to foreign exchange and currency service provider Currency Index.

However, if the euro is in so much trouble, is it wise to consider buying abroad at the moment?

There has been huge speculation about everything from evacuation plans on the Algarve to contingency plans for banks with euro exposure, but much of this is scaremongering, according to Robin Haynes, managing director of Currency Index.

One in four of us now prefer homes with a contemporary look to more classic styles, according to new research from property website SmartNewHomes.

The research found that Victorian architecture was the most popular (25.6%) among respondents, who were asked to vote for their favourite from a list of homes from different eras. This was closely followed by modern (24.6%) and Georgian (16.5%).

However, houses from the 1930s, which make up a significant proportion of the UK's suburban housing stock, were the least preferred, with only 3.3% of the vote. Tudor architecture was chosen by just 4.7%, and 1950s’ homes by 5.4%.

In a similar survey in 2006, modern architectural styles came in fourth place, some way behind traditional period styles such as Victorian and Georgian.

North London estate agent Greene & Co is predicting a shortage of family homes in 2012 in London’s most popular family-friendly areas following a surge of registrations in the £1million-plus price bracket.

Demand for properties around Crouch End, West Hampstead and Maida Vale increased by 20% in the last three months of 2011, as families opted to stay in the capital to avoid escalating commuter costs.

David Pollock, managing director of Greene & Co, says, “Homeowners who previously would have moved out of London with a young family are now remaining in the capital, and this is creating a shortage of family homes.

Reports in last weekend’s Financial Times have highlighted the surge in new buy-to-let purchases,with many areas in London likely to be the first to benefit, according to property search consultant Expatfindaproperty.com.

According to the Financial Times report, landlords are taking advantage of weaker house prices to snap up bargain rental prospects in premier locations. While some are cash purchasers, others are using cheap borrowing costs to expand their portfolios.

Expatfindaproperty.com’s own research suggests that rental yields in many parts of London, in particular, are starting to rise steeply, following many years of static, or only gently-rising, prices. In particular, demand for rental homes near to prime commuting transport links, such as those in the Clapham, Earlsfield, Wimbledon and Raynes Park areas of South West London, has seen agents arranging block viewings, with would-be tenants forced to bid against each other to secure a property.