The average price of London property has fallen by nearly £10,000 since this time last year, according to Rightmove.
Properties in the capital are on the market for 1.5 per cent (£9,423) cheaper than a year ago, the biggest fall since May 2009.
The decline has been blamed on the drop in the price of high-end properties and those in inner London, with the rest of the market showing resilience.
The overall average asking price of a property in London is now £649,772, which is £10,000 below the all-time high.
Miles Shipside, Rightmove director and housing market analyst, said: “The more discretionary upper end of the market is having to tempt buyers with cheaper asking prices, off-setting the higher purchase taxes in this sector.”
He added: “Demand continues to be strong, but at the right price for the right property.”
He also said that “any slowdown in activity will be counterbalanced by the market’s current fast pace. Indeed, in locations where choice of suitable property is limited hesitation could mean losing out to others who still decide to act”.