Prime central London prices fell 6.9% in 2016 – but this was better than Savills’ expectations.

The agent says it initially predicted a 9% fall in prices at the top end of the market, but is now predicting zero growth over the next two years.

This means that prime central London prices are down 12.5% in total since the December 2014 peak.

Lucian Cook, Savills UK head of residential research, says higher Stamp Duty taxes and political and economic uncertainty continued to suppress prime London residential values throughout 2016, meaning prices were adjusted by many, helping give a minor boost in transactions during the autumn.

According to data from Lonres, central London sales of properties worth over £1m were 21% down year on year in 2016. In the three months to the end of July, transaction volumes were running at about half the same period in 2015, but in the last quarter of the year had recovered to within 16% of 2015 full year numbers, according to Savills.

Savills’ own market data suggests that from January to the end of November there were around 320 sales worth over £5m in London, with a total of over £3.7bn spent in this part of the market. In volume terms, sales were 17% below those in this bracket in the same 11-month period of 2015.

However, the agent says the very top end of the market has been more active than in 2015. In the 11 months to the end of November, £1.43bn was spent on properties worth over £20m compared to £1.07bn in 2015.

Cook said: “Recent market activity demonstrates the continued appeal of prime London property at the right price.

“But buyer sentiment remains fragile. Improved transaction levels are the result of adjusted pricing and should not be seen as a precursor to price rises in the foreseeable future.

“High Stamp Duty rates and the uncertainty created by negotiations to leave Europe will still need to be factored into expectations on value.”