Knight Frank's Prime Global Rental Index rose by 1.6% in the final quarter of 2012, taking the annual increase to 5.1% and putting the index 20% above its post-financial crisis low in Q2 2009.

Property prices in London and other global financial centres "are now, in many cases, fundamentally unjustified," says UBS. "The risk of a real estate bubble in these cities has risen sharply."

London trumps Hong Kong and New York for the dubious honour of being the most expensive world city to live and work in, with a price per head for renting residential space plus working space coming in…