Prices for prime central London residential property have risen more than 40% above the post-Lehman low reached in March 2009 and 7% higher than the March 2008 pre-Lehman peak. , reports Liam Bailey, Knight Frank’s Head of Residential Research.

Despite the ongoing uncertainty resulting from the Eurozone debt crisis and on-going global economic, demand outpaced supply and this led to strong price performance.

“Price growth continued through December with a 0.8% rise, taking total growth over the last 12 months to 12.1%,” said Bailey. “Price growth over the past year has been particularly healthy in the £1m to £2.5m bracket, reflecting strong demand from European andAsian investors for investment properties. Prices in this bracket rose by 14.1% in the 12months to December.”

Areas that have seen particularly strong price growth over the course of the year include Chelsea (16.6%), Hyde Park (14%), Kensington (13.9%) and St John’s Wood (13.3%).

“Our analysis of market activity in the three month period to December, compared to the same period in 2010, paints a positive picture of demand and sales activity,” added Bailey, confirming that the Eurozone crisis, which appeared to reach something of a crescendo in the pre-Christmas period, has had little impact on the prime London property market.

Bailey concluded: “As 2012 begins, our view is that the prime central London market will see slower but still positive price growth. As outlined in our recent forecast we expect to see 5% price growth in 2012.”