Research by estate agency Haart found house prices in the capital were 1.2% down on February last year.

East London values fell by 6.5% over 12 months while the number of transactions had declined 7.7% over the same period.

The firm’s reasarch did suggest that demand in the capital was still strong, however, with around 20 people competing to buy each home.

Haart CEO Paul Smith said: “New housing stock across the UK materialised in February with supply up almost 11% in a single month.

“This is is matched by a similar uplift in buyer registrations – a sign of consumer confidence in the market.

“So far this year average house prices are showing no significant fluctuations, which is good news for affordability.

“First-time buyers are now benefiting from a dip in the average price of a starter home by 2% annually and from broader economic factors such as low interest rates and Help to Buy incentives.

“Despite this promising start to 2015, the number of new home starts promised post-election by the main political parties falls well short of what is needed.

“We as a country are still lacking a strategic long-term policy to address supply.

“After showing no growth last month, London’s average property price has declined annually – which is no bad thing for affordability and sentiment.

“This is no boom and bust but the beginning of a return to normality following the peak of the market in Spring 2014.

“The capital’s property market is still bustling with 20-plus potential buyers chasing each property for sale.”

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