Prime London property prices have risen by 9.6% over the last 12 months and are now 35% higher than the post-credit crunch trough in March 2009, according to Knight Frank.

Prices in the capital’s best areas increased by 0.7% in July, taking values to a record high, while rents rose by 0.3% in July, taking the average rental price 1% above the previous peak in March 2008.

Gráinne Gilmore, head of UK residential research at Knight Frank, comments:“The latest results from the Knight Frank Prime Central London Index highlight the difference between the central London market and that in the rest of the UK. While owners of properties in central London have seen the value of their home rise by nearly 10% since July last year, average values in the wider UK market have fallen by over 1% during the same period.

“The rising level of supply has gone some way to addressing pent-up demand in the market, but the desire for prime properties in the capital looks set to continue, signalling a further rise in prices throughout the rest of the year, albeit at a more modest pace.

“The strongest sales markets are in Chelsea and Mayfair where values have risen by 7.7% and 7.2% respectively over the last six months. The Belgravia lettings market is leading the way with a 1.8% rise in values over the last three months and the highest levels of demand.”