The House Price Index for England & Wales grew by 5.4 per cent per annum during the period observed. This has been a considerably slower pace compared to the M1 money supply growth. The house price growth has been mitigated by new construction and by privatisation of council flats.
In the area of Greater London, new construction is strictly limited. This is why the growth of money in circulation pumps up London property prices by a faster rate than prices in the rest of the country.
In Westminster, this mechanism is even more pronounced. Noone will ever build more flats in Westbourne Terrace, for instance. Most residential buildings are listed, no land for new development is available. That's why Westminster House Price Index has relatively closely mirrored the M1 money supply aggregate.
Sure, foreign buyers have also had an impact on the house price level in Central London. However, money supply in most other countries keeps growing at a similar rate as the British M1 over time. Thus not much difference.
Over an extended period of time, property prices are more likely to grow faster in metropolitan areas than in suburbs or villages. (Depending on location, of course.) As wealthy people tend to reside in attractive city locations (or own rental properties there), their wealth keeps rising accordingly.
A cause for a Piketty tax? Not really. A steeply progressive property tax solves nothing. The government will always squander the proceeds. Rather, I would encourage other cities to thrive and prosper. Central London is too busy, anyway.