House prices in London are on the rise again as City bankers splash out on multi-million pound homes.

Research by upmarket estate agent Knight Frank today showed prices in the capital rose 1.2% this month and are now up 11.4% since March.

The recovery was driven by the top end of the market where homes which are worth more than £10 million rose 1.9% in value in November.

However, homes in the sub-£1 million market rose by only 0.5% this month as the majority of Londoners continued to struggle.

And despite the recent recovery, prices in London are still 15.2% below their peak in March last year.

Liam Bailey, head of residential research at Knight Frank, said: “It is becoming clearer that it is the very top end of the market that is leading price growth.

“City money is becoming more apparent as we get closer to the end-of-year bonus season, and with the upper end of the market benefiting most, it is clear that demand from senior management is driving the market.

“This rise in prices at the top end of the market has been reflected by significant new activity in the £20 million and £30 million sector. Deals at this level were taking place on a monthly basis prior to September — since then they have been almost weekly events.”