How to address the person being recommended in a recommendation letter? How should one "address" the person for whom I am writing a recommendation letter in the letter? 

Scenario: 


I have known John Doe for many years and am familiar with his work. We address each other on a first name basis. I've been asked to write a letter supporting John's application. When I write about him, should I write


  Dr [or Mr, in case of undergraduates] Doe's works are well-written ...


or can I get away with


  John's works are well-written ...



Personally I feel a bit strange writing Dr Doe for someone I know so well, but I wonder if it is better to err on the more formal side? 



For what it is worth, the field is Mathematics. And for future reference, I do not want to limit the question to a particular level of application (for graduate school, fellowships, or for jobs); I suspect that shouldn't make a difference in the answer, but if it does, feel free to indicate.
I have seen both used in recommendation letters, regardless of the strength of the recommendation letter itself. I would, myself, recommend Dr. John Doe / Dr. Doe for most professional relationships, except when it is clear that you have formed a close professional relationship (PhD student, or long-term collaborator or post-doc). In case you go for the surname, I would still use the full name at the first mention:


  Dr. John Doe was a student of mine at the University of X, where I teach Y, …. He later joined my research group as a Masters, then PhD student. John is an extremely bright student, …


(Of course, that's merely an example and not a good letter wording, so do not look at the wording itself, only the use of names…)