Prices in London’s most expensive postcodes have dropped by more than a quarter since 2014, according to Savills.
Aneisha Beveridge, Connells’ research director, said: “Properties that are now valued below their purchase price are very much a London-driven story.”
In the capital, 56pc of homes bought for at least £2m have fallen in value since purchase, with average potential losses of £570,301.
Successive stamp duty rises, which began in 2014 and have disproportionately affected higher-priced homes, have severely restricted buyer demand.
Changes to the non-dom tax regime have also deterred the wealthy international buyers that were major players in London’s priciest postcodes.
Mansion tax pain
Ashley Webb, of Capital Economics, said that the mansion tax was now also depressing prices in this section of the market.
Mr Webb said: “The mansion tax that was announced in the autumn Budget is definitely playing a role in top-end of the market value reductions.
“It is not coming in until April 2028, but I think a lot of people are re-evaluating the price of those homes now because buying them will incur an additional liability every year.”
He added: “The greater the fall in the number of homes that were thought to be valued at £2m, the smaller the revenue the tax will raise.”
But the price pressures spread beyond the very top end of the market. Nearly a third (32pc) of homes bought for at least £1m have fallen in value since purchase.
Among these homes that have recorded losses in value, the average fall has been £225,000 or 9.1pc.
A government spokesman said the mansion tax will help to fund public services “and is addressing a longstanding unfairness in our country, where a Band D home in Darlington or Blackpool pays more in council tax than a £10m mansion in Mayfair”.
