The average price for a three-bedroom house in central London has increased by £729 a day over the last year, equivalent to a quarter of a million pounds, estate agent Marsh & Parsons said.
The estate agent firm said the scale of house price inflation meant that prices rose by 19% since April 2013 to an average of £1.6 million, equivalent to £5,120 a week, or eight times Londoners' £658-a-week median salary.
The cost of homes in prime central London areas like Chelsea, Kensington, Notting Hill, Clapham and Fulham had increased by 12.9% in the last year and was up by 4.3% in the last three months to £1.5 million. This means that average house prices in those central London areas would hit £2m by 2016 if growth continues at its current rate.
Marsh & Parsons chief executive Peter Rollings said: "It’s staggering to think that the average price of a property in Prime London could be more than £2 million by the end of next year.
"These are extraordinary times for the Prime London property market. Smart buyers can earn more money from their house in a year than by going to work in a very well paid job. With returns like these, it’s easy to see why people are queuing up to buy prime London property.
"It's always difficult to call the 'top' of the market. But while comparisons are being drawn with 2007, the current conditions are actually remarkably different.
"It's difficult to see how prices can fall while demand for property remains so high. Compared to the same point last year, we have seen a 20% increase in demand and a 25% fall in the supply of property. Prime London is still a strong sellers' market and jackpot prices are fast becoming the norm."