Research from estate agents Knight Frank showed new-buyer registrations were a third lower in May than the previous year despite the stock of new homes continuing to increase.

In the mainly zone one boroughs, the average time a home was viewed before an offer was made went up 70% year-on-year signifying a hesitation to snap up properties as soon as they come onto the market.

Figures released by property analysts Hometrack showed the wider London market suffered from a price growth slowdown as the growth rate fell from an average of 0.8% per month over the last six months to 0.6% in May.

While in central London house prices struggled to climb higher in May with a growth rate of just 0.2%.

But Knight Frank’s data revealed the lettings market has enjoyed a three-month long resurgence.

The rate at which rent is falling has slowed since February when a 2.3% annual decline was recorded.

In March this fell to 2%, April 1.6% then following a 0.2% growth in rental values – the annual decline narrowed to 1.4%. The lowest figure since January 2012.

In its report Knight Frank said: “A prolonged period of strong growth combined with growing talk of a price correction means buyers have become sensitive to high prices in prime central London which mirrors a trend in the mainstream market.

“As the sales market pauses for breath it is starting to benefit the lettings market and several high value deals have been struck in recent weeks.”

Despite the positive figures the estate agent said a ‘full blown recovery’ was still a way off with only half of its offices reporting rising rents.

But it added that signs were ‘encouraging’ as new lettings registrations in the first four months of the year were 17% higher than the same period last year.

Knight Frank expects a further boost to the lettings market this summer as students flood into the capital before the start of the next academic year.