Signs of life are re-emerging in the property market as it prepares to enter the spring buying season, as agents herald the return of bargain-hunting first-time buyers and City professionals with bonus cash to spend.

Agents are expecting a steady market from now until the end of spring as confidence seeps back into parts of the market, despite rising inflation dashing hopes of a further interest rate cut.

Hamptons International has reported a steady stream of City bonus purchasers registering to buy in London, with particular interest in property in Kensington, Belgravia, Clapham and Fulham.

Phil Tennant, an associate director of Hamptons, said: “We have seen people lots of people come in from Goldman Sachs and Lehman Brothers and a few from JPMorgan, Morgan Stanley and Deutsche Bank.

“The ones that have been notably missing are Citibank, Merrill Lynch, Credit Suisse, Bear Stearns, UBS and Société Générale.

A survey by the headhunter Morgan McKinley has revealed that 71 per cent of those employed in financial services expect a bonus as high or higher than that of last year.

The total bonus pool is thought to be a better-than-expected £7 billion.

Agents say that the buyers who are emerging are being driven by a lust for bargains.

Mr Tennant said: “No one likes to overpay and a banker who is nervous will come up with a lot of complicated analysis.

"We have had them come to viewings with spreadsheets of price per square foot data.”

David Sandeman of the auction site Essential Information Group, said that after several years that had been like a “feeding frenzy”, sellers were finally adjusting expectations about prices amid tougher market conditions.

He said: “It really hit the buffers in the second half of last year. If the reserve was not just right, nobody was buying. Now sellers are being more sensible and sales rates are going up.”

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