THIS week the Moscow newspaper Vedomosti carried an advert for the £13 million London house owned by Michael Flatley, the Irish dance impresario. If it sells, it will be the seventh property to go for more than £10 million in the past few weeks — the same number that sold in that price range in the whole of last year.

One of those, No 15 Kensington Palace Gardens, has broken the city’s previous record, which stood at £40 million. Another, on the market for £18.5 million, had a buyer but has instead been let for a record rent of £20,000 a week, with two tenants bidding.

The world’s billionaires are loosening their belts and indulging in a property spending spree. A market that only a year ago was dead has burst into action. Last year the rich man’s barrier was clearly fixed at £1,000 a square foot in Central London. By that measure, the average three-bedroom semi- detached house would cost just north of £1 million.

Recent sales have driven straight through that barrier. Prices of £1,500 to £1,800 a square foot have been paid. In the case of Kensington Palace Gardens, the buyer paid nearly £2,000 a square foot for a main house in need of refurbishment and a secondary house within the same grounds. In terms of price and value, this is now London’s most expensive property.

So why now and why London? The City is strong, bringing back buyers for houses in the single millions, where supply and demand are more evenly balanced and prices are holding steady at their previous peak.

Above them, in the thin air of the billionaire market, prices are rocketing. Many buyers had been hovering for some time, viewing everything, but bidding on nothing. That pent-up demand is pouring out now. “Even the rich like a little back-up,” says Brian d’Arcy Clark, of Chesterfield, the Central London agency. “As soon as one bird settles, the rest come and feed.”

The rich have always been with us, but never in quite such high numbers. Five years ago wise heads were predicting an outflow of people and funds from London to Frankfurt, the epicentre of the euro. But the private-jet set has come to London in even greater numbers than before and Gordon Brown’s recent Budget has not clipped its wings. Fears that the favourable tax status of non-domiciled international residents would be changed proved unfounded.

Recent sales are all in the wedge of land running south west from Hyde Park Corner, covering Belgravia, Knightsbridge, and Kensington and Chelsea. They include a house in Bloomfield Terrace, Chelsea, which sold for £17.5 million to a member of the Mittal steel family.

Another sale was of a house in Chester Square, Belgravia, for about £12 million. The benchmark price for the smaller houses in Chester Square is now £7 million, compared with about £5 million a year ago.

Where there were five houses for sale in Eaton Square, there is now one. Of the four that have gone, one was the £20,000-a-week rental.

None of these sales was to a British buyer, though many were to buyers already based in London. Their presence attracts others drawn by the convenience, the language, the culture and, increasingly, the tolerance of the UK compared to the US.

Charlie Ellingworth, who runs the upmarket buying agency Property Vision, has just come back from Dubai, where the conversation was heavy with Arab experiences of misery in the United States. Even the richest people from the Middle East now find the US a tough environment in which to travel and to live. As a consequence, they are shifting their assets to London.

Then there are the Russians. Such is the strength of demand for London property that the estate agent FPDSavills has opened a Russian desk. It is manned, not by an estate agent, but by a former banker who has worked in Moscow, London and New York. Will Andrich will act as “front-of-house” for Russian clients, offering a personal entrée to the world of London property. Of the recent multimillion-pound sales, two were to Russian buyers.

The most notable was the record-breaking £41 million sale last week of No 15 Kensington Palace Gardens. It went to a man who had been renting No 15A across the road, in the face of competition from three other buyers.

A few years ago Kensington Palace Gardens was a dead zone of distressed ambassadors, living in houses beyond their country’s means, and empty hulks looking for private owners. Now, the upgrading of the road, the security lodges at either end and new 150-year leases is bringing in 21st-century grandees.

Anne Spackman was last week named Property Writer of the Year at the British Press Awards for the second year in a row.

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