Cluttons has downgraded its forecasts for the housing markets in London and the rest of the UK for the remainder of the year.
It says that by the end of 2019 it anticipates that prices in prime central London will have fallen by an average of four per cent over the full 12 months.
It says that any overhaul of stamp duty - as repeatedly hinted at in recent weeks by Prime Minister Boris Johnson and Chancellor Sajid Javid - may prove a turning point in transaction volumes but possibly not in price.
The agency says prices in the capital have already suffered their highest annual fall since August 2009 in the year to May - at which time prices were down 3.1 per cent on an annual basis.
Its latest report on London says: “Across prime Central and Core London price reductions remain commonplace. To date in 2019, 85.5 per cent of properties have been reduced in price prior to the point of sale. This compares to a level of 90 per cent in the final quarter of 2018.”
However, the agency says homes priced £1m to £3m across prime central London are performing well with an 18 per cent rise in sales during the first half of this year compared to the same period of 2018.
There were also twice as many super-prime (+£10m) deals completed in the second quarter of this year compared to 2018 in prime central London - much of this is down to overseas buyers taking advantage of a poorly-performing pound.
“Effective discounts are now over 25 per cent compared to June 2016, as sterling fell to a new post-referendum low against the US$ during the second quarter” the report says.
Cluttons believes that price growth across the UK as a whole is set to outpace the capital over the next four years.
James Hyman, head of residential at Cluttons, comments: “Whilst Brexit is the main predator in the super prime market, for the sub-£1.5m market affordability assumes that role. Every location has a price point, and areas where the market has readjusted to such levels are bucking the London trend.
“We are experiencing close to ‘normal’ market conditions when to be marketing a property priced in line with where the true value sits. A property marketed at 20 per cent off the highs of early 2015 will see immediate viewings, several offers and sell within a sensible time frame.”