Flip through the latest issue of Gulf Weekly.
Prices for central London properties rose by 20 per cent in the past 12 months and estate agents say they are now only 9 per cent lower than at the market peak.
Sales of low to mid-market homes are fuelling the recovery as first-time buyers snap up bargains as mortgages become more readily available.
The UK's upcoming General Election appears to have suddenly dampened the demand, although overseas interest in buying London property continues to grow.
Liam Bailey, head of residential research, Knight Frank, said: "The central London market has enjoyed boom-like conditions in recent months, at least in terms of prices, which rose by 20 per cent in the 12 months prior to the end of March this year.
"This growth has not been evenly spread, and it has been the low to middle end of the market, especially sub-£2.5 million, which has seen the strongest growth (23 per cent).
The more expensive price brackets have lagged (17 per cent for the £5m+ sector), reflecting the fact that the recovery in pricing started later in this part of the market.
"The rate of price growth in March, at 0.7 per cent, represents the slowest monthly rate of growth since last April, and suggests that price growth is beginning to slow on the back of higher supply, coupled with slightly weaker demand for property.
"However we can not overlook the importance of international buyers to the market. In the recently released Knight Frank Wealth Report, we reported that a record 49 nationalities bought residential property in central London in 2009.
"Despite the fact that London's position as the leading global city has been ceded to New York, the London prime residential market is still underpinned, to a considerable degree, by international demand.
"The rapid growth in London's pricing, reflects not only the stimulus given to the market from low interest rates and the weak pound - which have driven domestic and international demand - but also to very thin supply over the year, set against very healthy interest from buyers.
Knight Frank has been providing clients with Middle Eastern advice for the last eight years, and has now established Knight Frank Middle East, headquartered in Bahrain.
