Prices rose by 0.7 per cent in September from the previous month, pushing the annual rise to 10 per cent, while the quarterly pace of growth slowed slightly to 1.7 per cent, Knight Frank said in a statement.

Districts such as Knightsbridge, Hyde Park and Marylebone all beat average gains by 14 per cent, the report said.

“The growth in prices has taken place despite the impact of the March budget’s 40 per cent rise in the top rate of stamp duty together with new, and still undefined, rules for an annual charge on £2 million-plus properties held in certain ownership structures and the reform of non-resident capital gains tax rules,” the company said.

However, budget rule changes did affect market activity, with the volume of sales in the £2 million-£5 million bracket falling by 20 per cent in the three months to September from the same period a year ago.

The fastest sales volume growth has been seen among properties at £2 million or less, with an annual volume rise of 11.6 per cent.

Overseas buyers account for 41 per cent of buyers in the £1 million-plus prime London sector, and more than half of buyers for properties valued at £2 million or more.