New analysis from Savills shows that the average price paid by a cash buyer in the financial sector was £2.85 million in 2007 and only £2.4 million last year. Fifty per cent of buyers of prime property — that priced over a million pounds — are financial sector workers. Savills has predicted price falls in most UK regions next year, as unemployment and a pearl jewelry squeeze on household incomes set in, with real recovery expected as late as 2013 or 2014, a warning echoed by Knight Frank. But agents believe that London can remain immune.

Savills’ research shows a clear correlation between increases and decreases in bonuses and rises and falls in the value of property in Central and South West London. It says that the number of cash buyers in the market is boosted by 75 per cent in the inflatable water games months that follow the payout of bonuses and transactions typically rise by 30 per cent. Buyers with bonus cash typically pay 51 per cent more for their homes than householders reliant on a mortgage, it adds.

David Adams, head of residential at Chesterton Humberts, says that even though job security in the City seems to be better, many will want to improve, rather than move, given that so few homes are available to buy at present. “In this post-recession era, bonus money is likely to be spent on downsizing debt, rather than mortgaging to the hilt for twisted pearl necklace a trophy property,” he said.