House prices across central London are now 53% higher than five years ago – and while agents are worried about over-inflation, most are predicting further price rises.

According to Lonres, which works with agents in the capital, 81% expect house price rises this year.

This is despite the fact that they regard over-inflated prices as the greatest short-term risk to the market.

Lonres also reports that agents are worried by the prospect of a Mansion Tax on properties over £2m if the Tories do not get back in at next year’s general election.

It warns that, as both the Lib Dems and Labour are “fierce supporters” of the tax, it is likely to be implemented swiftly if Labour were to win.

Transactions over £2m now account for 36% of all sales in central London, says Lonres.

The organisation also reports a 17% rise in the number of properties for sale in central London, but a drought of cheaper properties, with 86% of agents saying that demand is outstripping supply.

The website Home has separately expressed concern about London house prices, saying that they have gone up 2.4% across the capital as a whole in the last month, bringing the annual rise to “an alarming” 20.8%.

It said growth has been “stratospheric”, taking the London market into bubble territory.

The site named other areas experiencing booms as the south-east, East Anglia, the south-west and the east midlands, with signs of recovery across northern regions.

Home director Doug Shephard said: “The property market continues to race ahead of many people’s expectations.

“The current booming areas are self-generating price momentum as falling supply leads to a severe demand-supply imbalance, which leads to further spiralling price rises and an even greater reluctance to sell.

“Such a feedback loop is highly dangerous for the stability of any market and explains why London property has overheated and now looks like an asset bubble.

“The Bank of England Governor may be ‘keeping an eye’ on the property market, but it is difficult to imagine how the supply problem can be dealt with quickly and efficiently before the market spirals out of control.”