Foreign property buyers are still paying astronomical sums for the finest homes on the best squares, but their influence on the wider London market should not be underestimated.

By obliging those with smaller budgets to look at less fashionable locations, they kept the capital’s residential market bubbling along last year.

Few parts of London have failed to benefit, as bonus cash was diverted from Belgravia, Kensington and Chelsea to Chiswick, Clapham and Islington – and on to outer suburbs.

The threat of any sudden reversal of this trend leaves many highly mortgaged homeowners feeling vulnerable. They will find that their new neighbourhood looks suspiciously like the “high tide mark” that they have been warned to avoid in a slowdown.

But most borrowers are some way from being forced into a sale by modest price adjustments. And many of the hardest-pressed buy-to-let investors will hold on until April, when changes to capital gains tax could mean a much-reduced tax bill.

Demand for homes should hold up as bargain-hunters – including the more experienced investors – take the opportunities presented by forced sales. Among these will be the investors of bonus cash. Savills, the estate agent, estimates that only £2 billion of bonus money has been set aside for property, down from £5.5 billion last year, though Cluttons thinks that such investors are merely biding their time.

Most experts predict a turbulent few months in London, but towards the end of year they expect a return to house-price growth.

From next year, the good cheer will, they say, have started to spread regionally again.

It may not be a pleasant start to 2008, but it’s not necessarily the beginning of the end, either.