Savills says values of homes in prime central London have plateaued after growing just 0.4 per cent in the second quarter of the year.
The agency's research department says established prime central locations such as Mayfair, Knightsbridge, Belgravia and Chelsea, where average values are in the region of £2,100 to £2,400 per square foot, have all recorded quarterly growth below one per cent.
But relatively lower-priced areas such as Marylebone, where prices average £1,600 per square foot, rose 3.5 per cent in the same quarter.
Meanwhile at the very top end of the market, homes worth over £10 million fell by an average 1.5 per cent in the second quarter of 2014, meaning that London's highest value homes on average saw zero growth on an annual basis in the 12 months to July.
However, values in these areas remain 48 per cent above their 2007 levels - a remarkable increase while most of the rest of the UK say property values plummet.
There may be worse to come, however. Savills says there will be a small one per cent fall on average in prices in prime central London in 2015 thanks to uncertainty over the result of next spring's general election, and speculation over possible new property taxes for the wealthy.
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Comments
Agreed on price reductions on rightmove, these are now feeding through in Hammersmith & Fulham, one of the most expensive boroughs in London. The winter will be grim with the looming interest rate rise ...
I must admit I think we will soon be coming to a peak. The prices are very extortionate in London especially - it is only a matter of time before they start to deplete.
Not really that surprising given the potential increase in the stamp tax and possible new taxes for homeowners with expensive properties. Plus prices can only go so high before people can't afford to buy anymore, and working in London I know that a lot of normal working people have already been priced out of central london. Although I know its a mixed bag, with some increases and decreases, only time will tell I suppose.
A lot of price reductions on Right Move every day - Chelsea, Kensington, even Clapham