Prime property in London increased by 3.1% in March, leading to an annual price growth figure of 32.0%, according to Knight Frank. Prices have now increased for 27 consecutive months, says the agent, with the last price fall recorded in December 2004.

The increase for the first quarter now stands at 10.2% for Prime Central London, while flats increased by 7.5% in the same period.

Supply shortages are continuing to fuel this increasingly dramatic rise, as well as the growing international demand for good London property: in March the supply of newly available property fell by 27%, compared to February while the number of prospective purchasers increased by 16%.

Some of the best performing areas singled out by Liam Bailey, Head of Residential Research for Knight Frank, were Chelsea and St John?s Wood.