A record number of homes worth over £5 million changed hands in 2013 as demand for London's top addresses remained strong, though price growth at the top end of the market was significantly lower than the average across the capital, according to latest analysis from international real estate adviser, Savills.

There were more than 500 sales priced over £5 million across the market last year, a 24 per cent increase on 2012. The total value, at £5.2 billion, also represented a 24 per cent uplift. At the rarefied £10 million-plus end of the market, there were over 160 transactions, 25 per cent higher than 2012, with a total value of £3.0 billion, up by a third.

After a relatively slow start, this segment of the market picked up around Easter and the last three quarters have all set new records. A total of 130 £5 million-plus sales transacted in the last three months of 2013, with a total value just shy of £1.3 billion.

However, values at the top end of the market underperformed the prime central London average. On average prices rose 7.9 per cent, but in the ultra prime market (over £15m) they rose by a much more modest 2.1 per cent.

Prices paid for properties over £5 million average £2,338 per square foot. Importantly, this figure is level with values achieved in the previous two years, suggesting that while demand remains strong, values are entering a period of consolidation.

Price growth was lowest in locations, where values are at their highest compared to the 2007 peak, most notably Knightsbridge and Belgravia which are 47.4 and 35.0 per cent above peak, but rose just 1.8 and 1.7 per cent respectively in 2013.

"It is clear that demand for prime London residential stock remains strong, but very much focused on the best trophy addresses and sensitive to over-pricing," says Lucian Cook, head of Savills UK residential research. "Constrained stock levels continue to underpin demand, with the majority of prime central London owners adopted a holding position once invested.

"Talk of increased taxation dampened activity in the early months of the year, backing up our expectations that there will be a lull in the market pre-election. But assuming no further tax increases targeting high value properties, we anticipate 5-year prime central London price growth of 23.1 per cent."

A small number of core prime central London golden postcodes attracted the majority of high value sales: SW1 (Knightsbridge, Belgravia, St James's) accounted for 23 per cent, W8 (Kensington) 14 per cent, SW3 (Chelsea) 13 per cent and SW7 (South Kensington) a further 10 per cent.

The majority of sales were resale properties, with new build accounting for just 14% of £5 million plus sales - in part a function of relatively low levels of finished high end new build stock.

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