The total value of sales in some of London’s most prestigious postcodes has plummeted by nearly 25%.
The drop is a result of a slight decrease in prices and a drop in the number of transactions in part prompted by changes to stamp duty which came into play at the end of 2014.
The overhaul of the system means the amount of tax paid on homes costing more than £938,000 has increased and held back the booming prime market in the capital.
The combined value of the houses and flats sold in prime central London areas such as Belgravia and Chelsea came to slightly less than £3billion in 2015, 24.5% less than the 2014 total, according to LonRes, a data provider.
This means average prices decreased by 1.4% in wealthy areas while there has been a slower rate of transactions.
It is thought other external factors, like oil prices and changes to non doms legislation - for those residents whose permanent home is outside Britain – have also made an impact.
Director at LonRes Anthony Payne told the FT website: “The top end of the market in the last few years has been reliant on foreigners, but a series of things are affecting them that are out of the government’s control — the strength of the pound, the weakness of the oil prices, the state of Chinese markets.
“Those people who were awash with cash don’t have as much cash to spend.”
Prices per square foot in prime central London dropped slightly from £1,839 in 2014 to £1,813 in 2015.
In areas such as Marylebone and Camden prices were almost static, moving from £1,286 to £1,287 a square foot.
Fewer homes were sold in both areas, with prime central London home sales at more than £5m dropping by 30.5%.