Average prices across all of prime London properties fell by 2.2% in the final quarter of 2016 compared to the previous three months, according to Savills. It added that property prices have now dropped 6.9% year-on-year and 12.5% from their peak in December 2014.

The estate agency said that sales in prime London have continued to be impacted by higher Stamp Duty costs and economic uncertainty.

However, prices in outer prime London, where the average price is just under £2m, have been less affected by the removal of the Stamp Duty slab structure as prices slid by 6.9% from the final quarter of 2015 to a year later, and by 2.7% since their height in December 2014.

Lucian Cook, Savills UK head of residential research, said: “Committed sellers increasingly understand the need to factor in both the additional Stamp Duty and economic uncertainty to their price expectations in order to attract still very cautious buyers.

“We saw a real dearth of transactions over the late spring and summer months following the race to beat the new 3% surcharge. But further price adjustments, coupled with the currency play for international buyers, appear to have triggered greater buyer commitment and prime London sales volumes picked up significantly in September, October and November before easing back in December.”

Savills is forecasting no growth for the prime London market over the next two years, with the expectation that growth will total 21% in the five years ending 2021.