Two new sets of figures show the prime London property market has slumped in recent months after years of surging ahead.
Analysis of Land Registry figures shows that prime central London house prices fell 11.9% in the second quarter of this year, compared to the first three months.
Transactions in prime central London fell 28% to 5,174 for the year, the lowest figure since 2009.
But annual price growth across Greater London was healthier at 6.7%, as buyers target cheaper parts of the capital.
Naomi Heaton, chief executive of London Central Portfolio, said London is dividing into a fast lane and a slow lane, with the brakes firmly on at the more expensive end.
“This comes as no surprise. Pre-election clouds loomed over central London for many investors at the beginning of the year, suppressing buyer activity.
“Ramadan and the traditionally quiet summer period has held back any conspicuous recovery.
“Coupled with some hard to swallow taxes for higher end properties, this period of subdued sales and price growth was anticipated.”
Although Greater London has performed better, there are signs that it is slowing as well.
Heaton said: “Growth has reduced to 6.6% over the year with prices rising 2.2% over the first quarter to reach an average of £537,308.
“Volumes, however, fell by 9% over last year with just over 106,000 sales taking place.”
Separate figures from LSL, published today, show that London has been knocked off pole position after spearheading house price growth for the past five years.
It now ranks eighth out of the 10 regions in England and Wales in terms of annual rises with 1.8% price growth, ranking only above the North and Wales.
This has halved from 3.6% in May, and this downtrend is now lowering the average growth for England and Wales as a whole.”
Adrian Gill, director of Reeds Rains and Your Move estate agents, said London has been hit by more aggressive stamp duty taxation on pricier properties, while the rise of sterling against the euro has deterred foreign buyers.
“London property sales in the month of June were 13% lower than a year previously – and in the most expensive boroughs of Kensington and Chelsea and Westminster sales during Q2 were down 33% and 31% respectively year-on-year.”
But Gill said there were signs that the top tiers of the London property market were now rallying, with property values recording healthy monthly rises of 2.3% and 2.1% in Kensington and Chelsea, and Westminster.