House prices hit a new peak last month, 7pc higher than their level before the global credit crisis began, as the most expensive parts of London became even more expensive, despite the downward trend across the rest of the country.

The survey by estate agents Knight Frank stands in stark contrast to recent reports of the national housing market from Halifax and Nationwide, respectively Britain’s biggest mortgage provider and building society. But, with a 35-year track record, the estate agent’s report is the longest-established analysis of house prices in the capital and it reinforces reports in this space and elsewhere that London property prices are decoupling from the rest of the country.

Foreign buyers helped expensive housing in the capital become more expensive, with prices recovering by 40pc from their post-credit crunch low in March, 2009. Liam Bailey of Knight Frank said: “Demand from European and Asian investors for prime London property, despite uncertainty resulting from the Eurozone debt crisis, outpaced supply and led to strong price performance, taking total growth over the last 12 months to 12.1pc.”

But it’s a very different market outside the capital. Martin Ellis, Halifax economist, said: "With an annual decline of 1.3pc in December, house prices held up well last year in the face of the difficult and deteriorating economic climate and substantial pressure on households' finances.

"There is, however, considerable uncertainty regarding the prospects for the UK economy which will, to a large extent, depend on how events in the Eurozone unfold. As a result, the outlook for house prices is also uncertain."

Similarly, Robert Gardner, Nationwide's Chief Economist, said: “Resilience was less evident in other areas of housing market activity in 2011. For example, the number of mortgage approvals remained low, at just over half the long- term average.“

That mortgage famine is forcing more people to rent for longer, pushing up rents and profits for buy to let landlords. While the consensus view remains that national average prices will drift lower, London seems to have decoupled from the national trend. Anecdotal evidence from surveyors and mortgage brokers suggests that good quality homes in London continue to be snapped up by eager buyers before prices can be haggled down. Continued via 'The Telegraph'

London house prices continue to climb even as the rest of the country's fall.