Homes sold for £2m or more in prime areas of London over the last three months have seen prices rise 3.2% from the same period a year ago, according to data from property group Lonres.

However, homes sold for under £2m saw prices fall by 5.8%, compared to the first quarter of 2017.

This reflects a reversal in fortunes for these two segments of the market: two years ago homes sold at £2m or more recorded annual falls of 5.5%, compared with growth of 4.4% for those priced under £2m.

Marcus Dixon, head of research at Lonres said:

“Homes sold below £2m, recorded the most significant prices falls, as the wider London housing market slowed and fewer investors entered the market.

“This contrasts with the market above £2m. Demand for these properties appears to be increasing, prices having fallen earlier and buyers, many of whom are owner-occupiers, have begun to see value, even with Brexit uncertainty still looming.”

Still, overall prices across prime London fell by an average of 3% compared to the same period last year, even though the number of transactions increased by 3%, with the market for homes over £2m continuing to see the most activity.

According to Wetherell, this overall slump in the prime London market is due to a large extent to the government’s stamp duty, which has dampened the market beyond even their own expectations.

“They’ve done what they wanted to do, they’ve taken the heat off,” said Wetherell. “The problem has they turned on the cold water tap too strong.”

Meanwhile, according to the Halifax House Price Index released today, prices across the UK have fallen by 3.23% in the first three months of the year.