London prices have gone up 404% over 20 years

Central London house prices have rocketed 404% over 20 years, research by top-end London property specialists Knight Frank reveals.

In a survey looking at prices from 1986 - when the City reforms saw banks merging their services with brokers and market making firms, kicking off a long period of strong growth.

In the same 20-year period property prices across the UK have gone up 339 per cent, 16 per cent less than prime central London property prices.

Knight Frank's head of residential research, Liam Bailey, commented: "The real impact of this growing wealth has been on property prices and demand for property in the centre of London.

"Always desirable, London’s market has become super-charged in recent months – with the most recent wave of hedge fund wealth adding to the competition for property.

"Prices in central London now stand 23.5 per cent higher than they did only 12 months ago. This is the highest rate of growth in prices since June 1997 when the annualised rate was 25 per cent. Prices jumped for the most expensive homes in the capital by 2.2 per cent in September alone."

He added: "Our records reveal that the number of buyers registered to purchase property in central London is 111 per cent higher than the same period last year."

However, Knight Frank finds that demand is not being met, with housing stock down 50 per cent compared with September 2005.

"This together with the overwhelming number of applicants was the difference between 0.3 per cent monthly growth experienced in September last year and the strong 2.2 per cent monthly growth this year," Mr Bailey concluded