Prime residential property in London now costs around 1,200 pounds ($2,300) per square foot, compared to 1,000 pounds ($1,900) in New York, according to CB Richard Ellis Hamptons International.
And the so-called "super prime properties" in London are going for up to 3,000 pounds ($5,715) per square foot, compared with 2,700 pounds ($5,100) per square foot in New York.
Foreign buyers own 51 percent of the 2 million-pound-plus ($3.8 million) market in London, Knight Frank research shows, compared to 34 percent of the equivalent market in New York and 27 percent in Paris.
The most expensive homes sold this year — a 33 million-pound ($62.8 million) house in Belgrave Square and a former office block on Park Lane — were sold by the Savills real estate agency to buyers from the Middle East.
But even those are dwarfed by the world record 70 million pounds ($133.2 million) paid by Indian-born steel tycoon Lakshmi Mittal for his home at Kensington Palace Gardens in April 2004.
The high prices demanded for prime residences also have been underpinned locally by the 7.5 billion pound in bonuses paid this year to around 330,000 workers at financial firms in the British capital.
Another reason for the continuing high prices is the relatively small number of residences available to buy in the center of London, many of which are only available as leasehold properties.
A leasehold property means that buyers can only purchase the right to live in the building for a set number of years — the number that the lease has to run — and at the end of the lease, ownership reverts to the freeholder. To live there, you pay the landlord a ground rent as well as a service charge to manage any communal areas inside and outside the building.
In most cases, leaseholds run for more than 100 years.
One man happy with the soaring property market in central London would be the Duke of Westminster. He inherited 300 acres of land — in two of the city's most desirable neighborhoods, upmarket Mayfair and Belgravia.
