Residential property prices for prime London buildings continued to rise last month, adding 1.1%, according to new statistics from one estate agent.

Data from Knight Frank indicates low supply coupled with firm demand means the value of homes in areas like Chelsea is advancing steadily, with the year-on-year increase standing at 10.3%.

Liam Bailey, head of residential research at the investment property specialists, points out the capital is going against trends seen in other parts of the country, as the UK-wide average dipped one per cent over the period in question.

And residential property in the region is particularly attractive to international and City-based buyers, it would seem, as this group is described as “the real drivers of demand”.

He notes viewing volumes are up 30 per cent compared with January 2010, saying: “The issue of tight supply continues, while stock volumes are running at 3% above the level seen a year ago, they are still down over 20% compared to January 2009.”

Britons with an interest in property redevelopment may wish to consider Knightsbridge and Kensington, as the districts are leading property price gains, appreciating by almost 6% since November, with values standing just 3.4% lower than record highs seen in March 2008.

Noel Flint, partner at Knight Frank Knightsbridge, points out instability in the Middle East is making London attractive as a “safe haven”, saying it continues to be seen as among the most desirable capitals in which to live and work, while rising Stamp Duty could see new listings fall further.

Commercial property to rent will continue to gain value, according to a report published by the estate agent earlier this month.

It predicts “strong growth” for central London office investment property, saying a “severe imbalance” between supply and demand will make letting charges climb.

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