London house purchase solicitors will be encouraged by a report from a leading estate agent confirming that property market activity in the capital is defying the remainder of the UK and continuing to be buoyant.

Knight Frank's Central London Index reports that home sales prices showed an increase of 10.3% in the calendar year 2010 and are now 26.9% higher than March 2009 and only 3.4% less than the all-time peak of 12 months earlier.

The districts where property price rises have been particularly strong are Knightsbridge and Kensington at up to 6% ahead in the last quarter of the year. These areas are attractive to overseas buyers who have been drawn to London by its stability, favourable exchange rates and the general appeal of the services, shops and entertainment in the city.

Head of residential research at Knight Frank Liam Bailey said that 2011 had started with demand continuing to be strong, including from some City-based prospective buyers in expectation of bonuses. The number of viewers was up by 30% compared with January 2010.

However, it was still difficult to meet this demand. Although the number of homes for sale was about 3% higher than a year earlier, this was still less than in January 2009 by more than 20%.

Conveyancing lawyers outside London have seen dramatic declines in the number of home sale completions in the last two years as a result of the credit crunch restricting mortgage borrowing and market activity.