The uptick in spending was driven by record-breaking expensive player signings. Welsh superstar Gareth Bale was signed by Real Madrid from Tottenham Hotspur for 91 million euros ($124 million), while Uruguayan Edinson Cavani moved to PSG from Napoli for 64.5 million euros.
FIFA said England's high spending was fuelled when the country's top division Premier League signed a lucrative television rights deal for three seasons last year. BskyB and BT paid £3.018 billion ($5 billion) for the rights, a 70 percent increase on the previous agreement, allowing them to broadcast Premier League matches.
Overall, FIFA said that 82 percent of spending came from nine countries, England, Italy, France, Spain, Germany, Russia, Ukraine, Turkey and Portugal, with the European region accounting from over three-quarters of the total market value.
(Read more: Premier League clubs set $980 million transfer record)
Meanwhile, spending by soccer clubs in both Argentina and 2014 World Cup host Brazil fell this year.
"A currency crisis afflicting emerging economies has reduced Brazilian and Argentine buying power in the international market," the FIFA report explained.
Brazil still remained a key talent pool however, accounting for 13 percent of the total number of players transferred.
(Read more: Workers at 'extreme risk' in World Cup host Qatar)
Rising 'conditional transfers'
There was also a significant increase in so-called conditional transfers, where part of the fee is fixed and the rest is performance-based. Fees from such transfers leapt 73 percent to a total of $525 million.
(Read more: Champions League success 'critical' for soccer teams' finance)