Prime London prices up 16.2pc

Average prices now stand at £1,738,783, with the cost of flats and maisonettes increasing by a third (33.2%).

Naomi Heaton, chief executive of London Central Portfolio, said: “Contrary to popular reporting in 2014, Prime Central London has continued to show very strong price growth at over 16%.

“This follows consistent growth since the recovery in 2010.

“PCL continues to benefit from its safe haven status in the face of global political and economic volatility.

“Despite being hit hard by the various taxes introduced during 2014, it continues to attract investment as one of the most globally desirable centres in the world."

There was a 14% increase in the number of transactions below £1m in 2014 as Stamp Duty changes started to take effect.

In contrast the number of sales between £2m and £5m fell by 15% while transaction numbers over £10m fell from 67 in 2013 to 52 in 2014.

But two of the most expensive sales ever made were in 2014, as a flat in Princes Gate sold for £50m and a flat in Chesham Place sold for £46m.

The market slowed in the fourth quarter of 2014, as transaction levels were 20.96% lower than in quarter four 2013.

Heaton added: “Whilst it is anticipated that activity in the market will continue to slow down prior to the general election, all the evidence suggests that it will rally again thereafter.

“The sector underneath the £1m price point becomes increasingly attractive, untouched as it is by new taxation.”