Property agents have reported a sharp increase in international inquiries in recent months from Malaysia and Singapore, with spikes coming immediately after interest rate cuts.

Property agents say house prices in the capital have fallen by about 15 – 20 per cent since their peak about a year and a half ago, but favourable exchange rates mean buyers from abroad can buy for as little as half what they would have spent a year ago.

Inquiries from France and Italy are particularly strong, as euro-investors can now get 35 per cent more for their money. Those with Singapore dollars, Taiwanese dollars and Japanese yen can make their money go even further.

Foreign property investors in London have played an important role in the recovery of the UK housing market in previous downturns, led by Hong Kong and Malaysian buyers in the early 1990s and Americans in the early 80s.