Half of buyers of central London property costing more than £1m were foreign, according to research by Knight Frank, the property group.
The high number, in the year to June 2013, will add to a growing controversy around affordability in the capital, and follows other reports suggesting the flow of foreign money into London housing is distorting the wider housing market. Central London or "prime London" are classed as those neighbourhoods around Hyde Park including Kensington, Mayfair and Knightsbridge.
Here there has long been activity by foreign buyers requiring large mortgages. Knight Frank's research found 49% of buyers in these areas were non-UK by nationality. When it came to buyers' country of residence, however the majority - 72% - lived here.
Non-UK buyers were made up mainly of Europeans and those from the Middle East. Russian buyers were also a dominant group, Knight Frank's research showed. It had previously reported on high numbers of French and Italian buyers, especially in early 2012 when fears around the future of the euro were high. Where the properties were newly-built the proportion of non-UK buyers rose even higher to 69%.
The supply of such property - which include landmark developments such as One Hyde Park - is very thin, however.
Knight Frank stressed that outside of the hugely expensive and international postcodes of prime central London, most buying was by UK nationals.
It said 93% of buyers of all newly-built properties in greater London, for example, were UK purchasers.
This news has been coupled with the fact that grandparents own almost half the equity locked in British homes but are increasingly selling up to help younger family members gain a foothold on the property ladder.
Property broker Savills says this trend has become a significant factor behind a revival in the property market, which has led to concerns over a new real estate bubble emerging. Savills has found that homeowners over 45 years of age hold 83% of the £2.5 trillion equity locked in UK residential property, whereas just 4.1% is owned by those under 35.
The findings highlight that the Government's so called Help to Buy scheme is necessary to support buyers struggling to raise a deposit. From January, the Government will guarantee 95% mortgages for homes less than £600,000 despite figures such as Business Secretary Vince Cable questioning the scheme.
The biggest regional proof of unmortgaged owner-occupied stock, worth £33.7bn, is in the South East, according to Savills. However, as cash for deposits is passed down this will create a gap between those with family who are able to provide help and those without.
"It will have implications for social mobility," Lucian Cook, head of research at Savills told the Daily Telegraph. Those home-owners aged between 54-65 are saddled with loans amounting to £118bn - the highest debt to equity ratio of any generation, said the broker.
