For decades, the capital’s house prices raced ahead of the national average – but now they are falling in prime areas

An elegant Georgian facade, a full-width balcony and an exclusive address in South Kensington just steps from the Natural History Museum and the V&A. Yet the listing price of this west London flat at Queen’s Gate Gardens has dropped by nearly £1m since last year, to £4.4m.

It is far from an isolated case. A nearby house originally listed at £20m was slashed to £14m this year, says a local estate agent. In neighbouring Notting Hill, a stucco-fronted property that came to market two years ago at £16m is now being offered for less than £14m, they said.