Sale prices for houses in the Trafalgar Square conservation area have shot up by 33 per cent over the last three years, according to research by Beauchamp Estates.
This means the area's house price growth has outperformed both Mayfair's and Marylebone's, where prices have gone up by 26 per cent and 24 per cent respectively.
Just over half (56 per cent) of the homes sold in the region over the past year were priced between £950,000 and £2m. Twenty-eight per cent of the properties were worth between £2m and £5m and 16 per cent were super-prime properties, costing more than £5m.
Paul Finch, head of new homes sales at Beauchamp Estates, said: "The location is adjacent to Mayfair and Belgravia, yet without the corresponding peaks in residential values.
"Purchasers in the Trafalgar Square quarter have the benefit of buying into a formerly overlooked location which is now undergoing rapid transformation into a luxury residential address, with the associated capital value uplift that occurs with regeneration and huge inward investment."
Prices have been climbing in Trafalgar Square after the Crown Estate started to invest in refurbishments for the area in 2002, focusing on public spaces, government buildings and renewing historic building facades.
There have been problems for high-end homes in other parts of London. In Chelsea, house prices fell by 13 per cent in 2016.