A SHORTAGE of property for sale is forcing desperate buyers to bid well over the asking prices, with competition in London particularly steep.

In Chelsea, for example, 39 Queens Gate Mews was put up for sale in March at £595,000. The shabby property, tiny at 1,076 sq ft, received 82 sealed bids — 18 of them for more than £800,000. The mews was finally bought by a developer for just under £900,000, even though it had no planning permission for an extension. Patrick Aschan of Cluttons said: “We were doing block viewings. The agent would turn up and there would be 25 people waiting at the door.”

Ed Mead of Douglas & Gordon said the sale of 28 Hans Place was a more typical example of the current market. The three-bedroom flat in Chelsea, was on the market for three months earlier this year at an asking price of £865,000. The seller withdrew the property only to put it back on the market three weeks ago for £1 million. It sold for £60,000 over the new asking price.

Outside London, the right property can also sell for more. Field House in Bentworth near Alton in Hampshire was originally put on the market in 2004 for £2 million. It failed to sell. Agents Lane Fox tried again in May at a lower price of £1.75 million. “After frantic bidding from four buyers last month, it sold for more than £100,000 over the guide price,” said James Grillo of Lane Fox.

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