Anyone trying to secure a home in London might feel uncharitable about the return of buyers from the City and overseas. It was bad enough in the boom to be outbid by these confident, cash-rich purchasers who milled insistently around the best squares and streets in the capital.

Those who thought there might be an opportunity at the bottom of the market have had their hopes dashed. Demand from the wealthiest buyers has been promptly revived and, with few homes on the market, bidding contests are again commonplace in Central London and the nice suburbs of the city’s southwest.

The latest data from the property website Rightmove suggests that prices rose 12.1 per cent to an average of £1.89 million in Chelsea and Kensington in the month ending October 10, and by 12.6 per cent in Hammersmith and Fulham, where the average is now £747,813.

But the influx of money at the top of the market is keeping London property prices stable while the rest of the UK struggles.

David Adams, head of residential at Chesterton Humberts, said that London is enjoying a “top-down” recovery, allowing it to shrug off the economic concerns restraining recovery in markets elsewhere in the UK.

“The market is being driven by downsizing — but the downsizing of debt,” he said. “International buyers are coming in to buy in Kensington, from a UK citizen who then goes on to buy somewhere larger, but cheaper, in Fulham or perhaps somewhere in Beaconsfield. People now want more space for less mortgage.”

The influx, after a brief respite in the worst of the slowdown, means that in key postcodes, prices have returned to heights last seen in 2007.

Yet Adams predicts that demand from overseas buyers will remain undiminished. “If you look at an Italian buyer, as far as they are concerned they are buying at 30 per cent below the peak because of the strenth of the euro. The only thing that could halt recovery is if sterling strengthened against the euro.”

But, while homeowners from other regions may look on enviously, it appears that not all of the capital can expect a boost from foreign cash and bonuses. Less sought-after areas may find themselves bypassed, as buyers opt for what Savills has dubbed the super suburbs — wealthy Esher, Weybridge and Cobham in Surrey, Northwood in northwest London, and Pratts Bottom in Kent, where space is cheaper but no less of a trophy.

Adams said: “Everything above £500,000 in London will benefit, but below that buyers are still dependent on mortgage finance and their ability to amass a deposit. It is a very fragmented market.”

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