The worst of the property market conditions are now over with strong interest from international buyers fuelling a rally in London and the South East, according to a new report.

Lack of supply and fierce competition from cash and equity-rich buyers are resulting in competition in the prime central London market but prices could slow down over the winter, says the latest analysis from Black Brick Property Solutions.

'We believe that the worst of the market conditions are definitely behind us as central banks remain committed to maintaining low interest rates, said Managing Partner Camilla Dell.

'However, the most likely outturn in the coming months is a slowdown in price rises. While the necessary conditions to a sustained recovery in prices are in place the recovery remains fragile,' she added.

It was international buyers who were the first movers in returning to the market and were buoyed by the additional and material bonus of a weak pound, the report points out.

'Contrary to many pundits who had forecast a protracted decline in prices, the UK residential housing market has continued to bounce strongly since the spring as the combination of a lack of supply and a large proportion of equity and cash-rich buyers has proven supportive. Indeed, those two factors have been at their most extreme in the South East in general and prime central London in particular,' added Dell.

The company predicts that overseas buyers will continue to take advantage of the weakness in sterling. 'While the pound has recovered a little of late, it remains well below levels of a year to eighteen months ago against almost all major currencies,' explained Dell.

The geographical spread of investors has widened in recent weeks with a marked pick-up in interest from South Africa and Asia, the company has found and demand from the Middle East also remains strong.

'Most of these investors are sitting on cash that is looking for a home and many remain sceptical of equities and worried about future volatility. Investors are therefore turning towards real estate, an asset with intrinsic value, and when they do the focus is very much on quality,' continued Dell.

'These savvy investors understand the importance of scarcity value in supporting long-term prices and rightly see prime London property as a unique asset somewhat insulated from the volatility and potential losses inherent in other asset classes,' she added.