Foreigners lift London land prices

London land values are set to soar 10% this year as money floods into the market from buyers in the Far East and Middle East, property agent Knight Frank said today.

The interest from Bahrain, Malaysia, Hong Kong and Saudi Arabia for the best land is expected to push up prices despite a flat market across the rest of the country this year, it said. Strong interest is expected in development sites new on the market including the smaller of Leicester Square's two Odeon cinemas and Paddington's North Wharf Gardens site.

Residential development land prices across the UK edged down for the second successive quarter in the first three months of the year, although the capital bucked the trend with a 2% rise in prices.

The agent's head of residential research, Grainne Gilmore, said: "The biggest demand for sites is in London and the south east, marking a further polarisation between the north and south of England."