Surveyors have reported that house sales have lifted to their strongest levels in six years.
The report, from the Royal Institution of Chartered Surveyors, comes with expectations that property prices are set to life even higher across the country.
However, there are also signs the pace of house price growth seen in London could cool later in the year.
Estate agents who market property in some of the most exclusive parts of London claim it's rising on average by more than £700 a day.
Marsh and Parsons' say that the average current price for three bedroom properties in 'Prime London' is £1,670,339.
They say that properties in their portfolio appreciated by 19% in the last year, fuelled by increasing interest from both foreign and British investors.
The Chief Executive of the Chartered Institute of Housing, Grania Long, has called for the government to urgently increase its housing building programme to stop parts of London becoming 'the preserve of the wealthy elite'.
The combined impact of high rents and local housing allowance reform means that poorer families are effectively being priced out of the private rented sector in some areas of London. My biggest concern is where they are ending up - social housing is at a premium across the capital...
It cannot be right that some areas of the capital are becoming the exclusive preserve of the wealthy elite or that people on lower incomes are simply unable to afford to live in the places where they work. Increasing the number of new homes we build is vital if we are to have any hope of sustaining mixed communities.
Poorer families are being priced out of London according to new research from the Chartered Institute of Housing.
In Kensington and Chelsea the number of people claiming housing benefit in the private rental sector has fallen by more than a quarter since March 2011. It has fallen by nearly a third in Westminster, according to figures released by the Department of Work and Pensions.
However the number of people claiming housing benefit across London has risen, especially claims from people who are working.
London prices have risen by 10.9%, according to latest Land Registry figures, the fastest rate since July 2010.
The average price of a home in the capital now stands at £409, 881.
The average 11.2% year-on-year increase in London took average prices to £541,313. Here are the prices for each London borough.Read the full story ›
London property sales have grown at the fastest rate in 10 years. Between March and September last year, 100% of London suburbs recorded an increase in sales, compared to the year before.
The North, the West Midlands, Wales and London were named in the Lloyds Bank report as the regions with the biggest proportion of "property hot spots". It also found the biggest increase was in the East London suburb of Newham, which recorded an annual increase of 62%.
The bank has attributed the rise to low interest rates, improvements in consumer confidence and the introduction of government schemes.
London house prices leapt by 11.2% during 2013, an increase which is more than double the national average.Read the full story ›
Asking prices for houses in London have gone up by 7% since last year, the biggest jump in the country.
The new figures from Rightmove show the average house price in London is more than £500,000.
London is leading the way when it comes to rising house prices in Britain. 22 of the 33 London boroughs have set new records for the average house price last November. The biggest increases were in the boroughs of Enfield Greenwich and Hounslow