Luxury properties in central London are more expensive than ever after having risen 12.5 per cent this year so far, according to property agency Knight Frank.

Prime central London real estate prices are 5.2 per cent above their previous peak in March 2008 and almost 40 per cent higher than just after the credit crunch in March 2009.

The firm has previously noted that the market mayhem in Europe and other parts of the world has pushed more buyers into the London market.

Knight Frank believes that central London prices will increase by a quarter in the next five years, backed by a recovering global economy and expanding wealth portfolios from 2013 and onwards.

Earlier this month, Knight Frank said that luxury property prices in Europe rose 6.7 per cent over the last 12 months despite ongoing fears over the eurozone debt crisis, counter-intuitively overreaching Asian values, which inched up just 2 per cent. Despite having some of the world’s highest gross domestic product estimates and healthiest economies, Asian property prices cooled substantially in the past year, according to the firm’s quarterly Prime Global Cities Index.