NoHo Square was a fabled project in London, a boom era splash of decadence and luxury targeting the city’s growing international affluent class.

Promoted by the flamboyant Candy brothers, Nick and Christian, the plan was to turn the former Middlesex Hospital site in Fitzrovia into an array of offices and posh residences. Backed by Kaupthing, the Iceland bank, the Candy’s paid £175 million ($262 million) for the property in 2006 and won approval for an 890,000-square-foot development the next year, including more than 200 luxury apartments.

Now the site is nothing more than an empty lot, a symbol of an ambitious development that never happened.

After a three percent bump in February, prices for prime London residential property are up 19 percent since the spring of 2009, according to new data. Prices in the core London neighborhoods are only 10 percent below the market peak of March 2008, the latest Knight Frank Prime Central London Residential Index shows.

Foreign demand is leading the surge, with 45 percent of the purchases of more than £2 million in the last 12 months purchased by non-U.K. buyers, the study found.

A U.K. consumer watchdog group is calling for reforms of the property industry, in order to encourage competition and reduce the dominance of large estate agents.

The much anticipated year-long study by the Office of Fair Trading (OFT) concludes that “innovation in this sector, in particular through online services, could have a dramatic impact on the cost of buying and selling a home.”

The report stopped short of calling for more regulation of the property business, something several industry groups say is necessary. Estate agents in the U.K. are not licensed.

By some accounts, Google’s move into U.K. real estate was a death knell for Rightmove, the dominant U.K. property portal. Rightmove’s stock initially plummeted in the wake of the announcement, with analysts lining up to explain how brokers will welcome Google’s free service over Rightmove’s annoying pay-per-play model.

"It will certainly blow Rightmove out of the water,” Sarah Beeny, host of Channel 4’s Property Ladder and a site owner told a reporter after Google went public with its plans. “You can only get your property listed on that site if you are an estate agent--what Google will do is level the playing field and they are doing it for free.”

That’s why Friday’s announcement that Rightmove is linking with Google Maps raised more than few eyebrows. The mega-portal will use Google Maps for all its property listings, while additional uses for Google Maps are "now in development."

In a ruling with implications for thousands of second home owners, a U.K. court Tuesday ruled that a British couple must demolish their home in northern Cyprus and return the land to the original Greek Cypriot owners.

David and Linda Orams bought the property in 2002 and later testified that local estate agents assured them were no legal claims on the property. But last year a European Court of Justice decided the property must be returned to the original owner, Meletios Apostolides, who fled when Turkey invaded the north in 1974.

Tuesday a U.K. court of appeal upheld that ruling and ordered the Orams to demolish their home, return the land, and pay Apostolides damages and legal fees.

By an overwhelming margin, investors chose London as the world’s top commercial property market, according to an annual survey by Washington D.C.-based Association of Foreign Investors in Real Estate.

London moved past Washington D.C. and New York, with Paris and Tokyo rounding out the top five. In the 2009 survey, London was second, in a virtual dead heat with New York and Washington, but this year respondents chose London by a wide gap, the association reports.

Fifty-one percent identified the U.S. as the best opportunity for capital appreciation, compared to 37 percent in 2008 and 26 percent in 2007. Two-thirds of respondents said they planned to increase their U.S. investments in 2010.

The annual survey reflects the responses of 200 AFIRE members, who control more than $842 billion in real estate.

Headlines from the world of property:

Dubai: Older Offices Have a Vacant Look

New buildings are gobbling up tenants, leaving older buildings to struggle. From the National.

New York: Priciest Condo Takes a Tumble

Price of condo in Philippe Starck building drops $7 million. From Curbed.

On Cyprus, once one of Europe’s second home hot spots, sales to foreign buyers dropped 84 percent in the last two years, new government data shows.

It’s a shocking turnaround for a market that was widely marketed throughout the United Kingdom, developing as an alternative to Spain. Sales peaked in 2007, when 11,281 homes were sold to non-Cypriots, according to filings with the Department of Lands and Surveys.

In 2009, there were only 1,761 units sold to foreign buyers, in the wake of a variety of scandals, Cyprus Property News reports.

Although 2010 will be a “boom year” for property investment in the U.K., it could lead to sharp declines by 2012, consultancy King Sturge warns in its latest report.

“There are clear signs the property investment market has started to recover,” the firm reports. But a wide variety of economic factors could create a “false dawn” and the “collapse” of capital values by 2012, King Sturge forecasts.

“All commercial occupational markets across Europe will remain soft” for two to five years and “rents will continue to fall,” the firms predicts. “In the office market the worst rental falls will be in Germany, Ireland and Spain,” King Sturge writes. “In the industrial market Spain and Hungary will do particularly badly.”

Any hint that Spain’s horror stories would fade into the past were ruined last week, when three British expats in Almeria were served with demolition orders for their homes. In total, eight homes in the town of Albox may be facing the wrecking ball, according to media reports.

Throughout Spain, municipalities are wrestling with how to deal with homes built illegally in the boom years, usually at the direction of corrupt local officials. Two weeks ago, 10 homes were demolished in Chiclana, after the developer ignored orders to stop construction. Homeowners climbed on their roofs to try to stop the demolitions and 28 people were arrested in protests, typicallyspanish reports.