London landlord Great Portland Estates today reported the first rise in property values since the start of the crash as the market in the capital turned the corner.

Property values were up 2.6% between July and September to £1.05 billion, bringing to an end two years of vicious declines since the summer of 2007.

Great Portland chief executive Toby Courtauld said: “Things are definitely getting better but the key question is over the economy at large.”

The firm, which owns offices and shops in the West End, the City and Southwark, reported first-half losses of £29.8 million against profits of £146.2 million in the same period last year.

Despite the rise in property values in the second quarter, they were down 2.7% in the first half after a dismal first three months.

Courtauld said: “There has been a resurgence of interest from investors in London with a significant weight of money chasing a limited number of assets. But rents are still under pressure and we don't think we will see a sustained recovery in property values until rents start to rise again. Our sense is that it is going to be the second half of next year.”

Great Portland today bought Marcol House, on the corner of Regent Street and Margaret Street, and a building on Newman Street from Istithmar World, part of sovereign wealth fund Dubai World, for £10 million and a share of future profits.