Agents are reporting signs of “green shoots” in the prime central London market, but much of the activity seems to be coming from foreign investors buoyed by the lower pound.

JLL said activity improved in the £1m to £3.5m price bracket during the first quarter of 2017, while Knight Frank has reported that exchanges increased 13% year-on-year in February and the number of £20m deals hit a high last seen in 2014.

Both agents also report that the extra Stamp Duty charges on higher priced properties are now being factored into the market.

Richard Barber, director at JLL, said: “We are pleased to report that we are seeing green shoots return to the market.

“While transaction volumes remain relatively depressed compared to 2013-2014, we are seeing the effects of the increase in Stamp Duty slowly being assimilated into the market.

“Although it is true to say that values have diminished, in some cases by as much as 13% over the last two years, we are now seeing the rate of diminution bottom out. The impact of Stamp Duty has been most profound at the upper end of the London market – most notably within the family house sector.

“However, there have recently been some significant sales at the very top end of the market where Stamp Duty becomes less relevant.”

Tom Bill, head of residential research for Knight Frank, described the PCL market as robust, with annual price growth easing to a 6.4% drop in March, in comparison to declines of more than 7% in recent months.

He said: “Transactions in higher price brackets have had a relatively robust start to 2017, reflecting a favourable exchange rate, reduced asking prices and strong demand for the best located and specified properties which, in some instances, has led to competitive bidding.

“The total number of £20m-plus deals recorded in the first quarter of 2017 was last exceeded in the last quarter of 2014, a period that experienced a rush of deals ahead of a Stamp Duty hike.

“The wider political background remains uncertain as formal Brexit discussions get under way, however the realignment of asking prices to reflect higher rates of Stamp Duty remains the primary driver of activity.”

It was a slightly different story in the prime lettings market.

Knight Frank reported fewer rental properties coming to the market, with the annual increase at 51% last June and down to 23% in February.

Despite this, the number of new tenants rose 1.5% in the year to February, with most activity in the below £1,000 and above £5,000 per week brackets. The market was slower in the £3,000 to £5,00 per week market, blamed on banks cutting their bonuses.

However, JLL seems to have the opposite problem, with an oversupply of lettings properties.

Lucy Morton, head of residential agency at JLL, said: “With Article 50 now triggered, the market is reflective of the uncertainty ahead and this has had an impact on both the sales and lettings market. The lettings market has been particularly affected, as companies are assessing their options and holding back on relocating employees and their families.

“This change has created an imbalance between supply and demand in the lettings market; supply currently exceeds demand although the pace of new properties being launched on to the market fell in the first two months of this year.”

She said the worst hit area for oversupply is the two- to three-bedroom market between £1,000 and £3,000 per week.

Morton added: “The super prime lettings market remains strong, where some hesitant buyers prefer to rent while they wait to secure their ideal property while also keeping an eye on the direction of the sales and mortgage markets.

“Our clients in this market tend to have budgets of £20,000 a week, on average. They are after an easy lifestyle, so properties that are furnished and interior designed are a must, though not too flamboyant, as they prefer to personalise them, for example, to showcase an art collection.

“The increased demand in ultra-prime lettings has filled the gap where corporate lettings has reduced.”