London property prices at record high

Overall, prime central London prices have gained 40% from the low point hit following the collapse of Lehmans.

According to the latest Prime Central London Index published by Knight Frank, demand from cash-rich buyers and foreigners looking for a safe haven for investment have caused prime house values to rise more than 7% higher than they were at the peak of the property market boom in March 2008.

Liam Bailey, Knight Frank's head of residential research, said: The three months to December 2011, compared to the same period for 2010, was a positive picture of demand and sales activity, confirming that the eurozone crisis which appeared to reach something of a crescendo in the pre-Christmas period, has had little impact on the London property market."

He added that prices increases were ‘particularly healthy' in the £1m to £2.5m bracket. Chelsea saw the greatest rise in property values, increasing by 16.6% in 2011.