The average prices for prime real estate in central London have skyrocketed in recent years, standing 34 per cent higher than pre-credit crunch levels, according to HM Land Registry monthly house price data analysed by the residential funds and asset manager, London Central Portfolio.

The rise in house prices in the London boroughs of Chelsea, Westminster and Kensington, compares to the rest of England and Wales where prices are still 12 per cent below their peak. However, the firm does not consider this evidence of a property “bubble” in central London.

It is therefore worth taking into account that this price growth includes a strong bounce-back following the fall in prices during the financial crisis, which began in 2007. This means that prices from the six-year period are actually in line with long term trends, which show average yearly price growth of 9 per cent, LCP said.

Secondly, property in London’s best addresses actually looks cheap to overseas investors, who currently make up about 60 per cent of the total buying population.

Investors from South East Asia, who at 40 per cent comprise the largest proportion of LCP’s buyers, have profited the most from a weakening sterling. For buyers in Hong Kong and Singapore, currency-adjusted property prices have actually fallen, dropping by 10 and 12 per cent respectively since their 2007 high. In Malaysia, where the ringgit has strengthened significantly over the last six years, the price drop was also 10 per cent and in Thailand, prices saw a marginal growth of 3 per cent.

“Whilst it may sound absurd, prime property prices in central London look particularly good value for international investors as prices in their home markets rise substantially and sterling remains so weak. For Singaporean investors, for example, the average prime central London property cost S$2,003,276 in October 2007 but costs S$1,718,044 today. So, not only does it provide excellent prospects of capital growth, given that strong demand consistently outstrips supply, it is excellent value for money for overseas buyers,” said chief executive officer Naomi Heaton.

Similarly, investors from the Middle East, where the currency is pegged to the US dollar, have also felt the benefit of the sterling’s decline. When exchange rates are taken into account, prices for these buyers’ stand just 6 per cent higher than the market peak prior to the credit crunch - thereby falling short of the long term growth trends.

LCP puts the popularity of prime central London property down to the city being a financial centre, a pinnacle of culture and an educational hot-spot. Moreover, the credit crunch and the eurozone crisis has made London a safe haven for foreign investors wanting to take advantage of weaker sterling. Lastly, on 4 July the Bank of England kept interest rates static at 0.5 per cent for the 53rd consecutive month, allowing the pound  to drop even further. The BoE has indicated that the rate most likely won’t change before 2016, providing for a lucrative investment market.