House prices in the U.K. have been buoyed by an improving economic picture, a lack of housing stock and a government mortgage scheme aimed to boost construction and help first-time buyers. Analysts have been split on whether the price increases signal a housing bubble in the capital.
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But a picture is emerging of a "two tiered" London property market according to Tom Bill, associate in residential research at Knight Frank.
"You have a London market that is two tiered, two separate markets where one is growing at a faster rate and the other is slowing," Bill told CNBC in a phone interview.
Real estate in so-called "prime central London" which includes areas such as Chelsea and Islington, has seen prices cool from an annual rise of 7.5 percent in February 2014, compared with 11.6 percent in February 2012, according to data from Knight Frank.
However, other areas just outside the center such as Canary Wharf and Fulham have seen property prices rise 11 percent in the year to February 2014, from an annual growth rate of 4.2 percent the same time last year.
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