Sales and rents are continuing to fall across prime central London, says Knight Frank.

The agent says prices for properties worth £5m and £10m declined 2.3% in the year to September, while properties worth between £1m and £2m dropped  5.3%.

Tom Bill, head of London residential research at Knight Frank, said Stamp Duty is now being priced in at the higher end of the market.

He said: “There is certainly evidence that Stamp Duty has had a profound impact on the liquidity of the market and an adverse affect on achievable prices. To this end vendors are being forced to reduce asking prices to levels which, in most instances, equal or exceed the purchaser’s additional tax burden. The perception of value is a prerequisite to achieving sales.”

Average sales prices in prime central London dropped 4.6% in the year to September, while rental values were down 3%, the smallest drop since June 2016.

Sales transactions were up 9.8% while the number of new lettings increased 2.2%.

The agent also reported an increase in buyer applicants, up 4.9% for the first nine months of the year, while the number of new prospective tenants increased 19.6% annually over the same period.

Viewing numbers also increased 9% between January and September.