Foreign buyers are returning to the London property market, partly because of fears for the stability of the euro in countries such as Greece and Spain, which is reflected in 55% of estate agents in the city reporting a rise in house prices and a consequent upturn in business for residential conveyancing solicitors.

Chief economist of the Royal Institution of Chartered Surveyors (RICS) Simon Rubinsohn said, "Politicians talk about our deficit, but Britain is relatively stable compared to the likes of Spain and Greece.

"The euro block is more vulnerable and, because Britain is not a player in the euro, it is a relatively stable place to invest and overseas buyers are looking at opportunities to invest here."

Kim Turner, a RICS member based in Kensington, London, said, "Some 80 per cent of our buyers are foreign. They are looking for prime residential property that holds its value and are choosing here because it is a relatively stable environment."

RICs also said new buyer enquiries increased to their highest since December 2009, while the number of properties rose slightly, with estate agents selling 17.4 properties during the last three months or just over one property a week.

However, it remains well below the 23.9 properties being sold every three months by estate agents at the beginning of 2008 and the 32 properties per three months at the beginning of 2004.

In recent weeks, UK house buyers adopted a wait and see approach in the run up to the General Election, concerned they may face rising interest rates and taxes.