Is the big smoke really running out of steam?

A third of properties in the affluent borough of Kensington and Chelsea have had asking prices cut by a third since coming to the market, research has revealed.

The data from property search engine Propcision, which provides data on Rightmove, shows that roughly 40% of properties listed for sale in Earl’s Court, a district within the borough, have had their price cut since coming to market.

Similarly, around 35% of properties listed for sale in Chelsea and Knightsbridge in prime central London have had a price reduction.

The average price reduction was around 8% of the original asking price.

Postcodes such as W1, W2 and SW8 tend to be the most active postcodes for price cut

But rather than a cut, Michelle Ricci, co-founder of Propcision, says this is more of a correction, explaining: “To make an analogy, it’s like throwing a ball into the air: at some point the ball will stop moving upward and shift downward. In statistics, we call this a point of resistance.

“The upward trend Prime Central London enjoyed for the past few years has started to show signs of resistance. This is typically associated with the start of correction although not necessarily a downward trend – as in the ball analogy.

“We feel the data suggests asking prices are holding steady with levels seen in the past six months. However, that said, there are particular areas of vulnerability that may start to show demonstrable evidence of a downward trend – most notably new-builds.”

Nick Hubner director of Chelsea-based agent Farrar, said Stamp Duty changes, falling foreign investment and the Brexit debate were all weighing down on property prices.

He said: “We have cut prices. The market has slowed since April 2014. It is down 10% to 15% and could drop further.

“The thing with Chelsea is that it is like a light switch and things can go on or off instantly.”

Rightmove figures show an increasing number of properties in London SW3 have come to the market since the end of last year, from 299 in December 2015 to 347 in March 2016.

Average prices also fell in the area at the end of last year from £1.3m to £1m.

Prices could fall even further if you believe a separate report from developers Arcadis that shows 35,000 prime London homes are due for construction in the next decade. This is a 40% increase on 2014 and will add nearly 11,000 new properties to Kensington and Fulham alone, according to the data.