According to Knight Frank, central London’s property prices grew by 1.1% in January which is the highest monthly rate since the credit crunch began to build in September 2007. From January 2007-08, the market grew by 26.2%.

Liam Bailey, head of residential research at Knight Frank, said: “While a gradual slowdown continues to take its toll on the main housing market, properties in prime central London appears to be proving resilient against the background of economic uncertainty.

“As this market depends to a very great extent on the strength of the City it is inevitable that the current unease in the financial sector is influencing its slowdown. However, it is clear that city money is still being invested in prime central London properties, though perhaps not with the same enthusiasm that followed last year’s bonus round.

“We are sticking by our forecast of 3% price growth overall in prime central London in 2008 despite the resilience shown in January. A view endorsed by an emerging belief that the Bank of England’s ability to introduce lower interest rates in the second quarter may be compromised by growing inflationary pressures.”