Cash is now king in the prime London market with six out of 10 of purchases made by investors or second-home owners.

In prime central London this figure rose to three quarters of all property purchases.

Buy-to-let investors accounted for one in three prime London property purchases in the first quarter of 2016.

Second-home owners behind another quarter of sales in the run up to the stamp duty surcharge 1 April.

This means that 40% of property sales were made in cash, up from 34% in the previous quarter.

Overall, buyer-demand increased 9% year-on-year in prime London and by 19% in the outer prime belt as buyers sought more affordable property, according to estate agent Marsh & Parsons’ latest London Property Monitor. 

Chief executive David Brown said: “Investors will always be the stalwarts of the Prime London property market – it’s the golden goose of capital returns, and people are still clamouring for a slice of the action.

“But second-home owners really jumped to it this spring too, and were much more prominent in the market than we would typically expect.”

Brown said this was by no means a typical quarter. “Sales activity has been exceptionally skewed by the additional layer of stamp duty for both buy-to-let and second-home purchases.

“Naturally, the knee-jerk reaction among these groups has been to hurry through property purchases before the deadline, and make savings while they can.

“Now the ruckus has passed, we’ll see much more orderly transactions over the summer months, as the market rebalances towards first-time buyers and other owner-occupiers for whom it will just be business as usual.”