The prime London residential property market has yet again demonstrated its resilience in the first quarter of 2012 despite the UK economy having slipped back into recession, the increase in the Stamp Duty Land Tax and the weakness of two of its traditional drivers: the stock market and the City jobs market.

Chesterton Humbert say that City bonus money no longer accounts for a large percentage of high value prime London property purchases and this is expected to continue as data from Morgan McKinley, shows that the number of new financial services vacancies was 56.5% lower in March 2012 than in March 2011.

Overseas purchasers accounted for just under 54% of all London sales transacted by the London estate agency, however the figure was much higher in Mayfair -over 70% and over 80% in Docklands, Hyde Park and Kensington and Chelsea. Recent instability within the Eurozone may have persuaded many southern Europeans to invest in the London property market and election results in France, Greece and Russia may trigger further interest over the coming months.

Robert Bartlett, Chesterton Humberts CEO, said: "The prime London residential market continues to outperform the UK property market and we do not foresee any reduction in buyer demand. Set against low stock levels, we are anticipating prices in the prime areas of London to continue to increase."

"It is still too early to assess the full impact of the tax measures implemented in the budget. We anticipate that the increase in the top rate of SDLT to 7% will be absorbed relatively quickly, although properties around the £2m level have become more sensitive to negotiation.

Bartlett added: “The proposed introduction in April 2013 of an annual levy on ownership and Capital Gains Tax on disposal for properties held within corporate wrappers is more contentious and requires further clarification with regard to the detail of the scope of application. The imminent consultation process, however, provides the property industry with an opportunity to urge the Government to consider the potential demerits of these measures, particularly with regard to the negative signals they send out to overseas investors."

"Meanwhile a worsening of the Eurozone crisis, although clearly not in the best interests of UK plc, may well trigger increased demand from international buyers on the basis that London represents a safe haven for investors. Moreover, in the event of a collapse of partial or complete collapse of the Euro, Sterling would represent a relatively strong and stable currency for flight capital."