Average prices dropped another 1.1 per cent in prime central London in the year to March according to new figures released by Knight Frank - meaning prices are now 8.0 per cent below their previous peak reached in August 2015.
In addition, the average asking price reduction for properties between £1m and £5m was 9.9 per cent in the year to February.
However, the agency says the number of properties listed for sale was 5.4 per cent higher in February 2018 than the same month last year
There was also a 2.0 per cent increase in sales volumes in the year to February 2018 compared to the previous 12 month period says the agency, citing LonRes data.
The agency nonetheless sense that some stability is being restored, with the impact of the late 2014 increases in stamp duty having been “substantially absorbed” and becoming an accepted cost of transacting.
“Indeed, an analysis of asking price reductions over the last year shows pricing has more than adjusted to take higher transaction costs into account. This over-compensation suggests the market has also undergone a process of self-correction following the bull market run between 2009 and 2014” claims a report from the agency.
But Knight Frank adds that is does not believe the market is yet likely to see any kind of strong upswing in terms of pricing or trading volumes.
“Political uncertainty surrounding the Brexit process and the finely balanced arithmetic in Parliament is providing continued grounds for caution” it warns.