Areas of prime central London return to growth

While average prices fell 0.7% on an annual basis, this was the most modest rate of decline recorded since June 2016. Knight Frank says the broadly flat result provides further evidence that the price declines of up to 7% recorded in the middle of last year are bottoming out.

Its analysis of pricing on a more local basis across prime central London shows that the number of areas that recorded a rise in prices during the month continued to grow in December.

The number was at its highest monthly level since May 2016. However, there is still no consistent pattern across different price bands.

For example, average prices rose 1.9% in the year to December for homes valued at between £5 million and £10 million, compared to a fall of 1.2% for properties priced at between £1 million and £2 million.

Higher rates of stamp duty had a more immediate and marked impact at the higher level of the market last year - which led to a quicker response in asking price adjustments and a more rapid recovery this year.

Activity also continued to rise modestly in December. There was a 5% like-for-like increase in sales volumes in the six months to November 2017, LonRes data shows.