While prices have increased, the latest data shows, they are 0.6% lower compared to this time last year, and 6.2% below the height of the market in 2014.

Buyers in London are negotiating 7.7% off the price of million-pound properties on average, with three quarters of all prime properties in the last quarter selling for less than asking price.

Prices in areas which historically have been some of the most expensive in the capital have continued to offer buyers greater ‘value for money’, including Mayfair and St James’s saw house prices drop below £2,000 per square foot for the third quarter in a row.

In addition, high-end homes in Knightsbridge, Belgravia and South Kensington, are now 18.5% and 16.7% below peak levels respectively.

Data shows that 92% of prime properties in South Kensington were also sold at a discount, with buyers on average negotiating 11.3% off the asking price.

However, certain areas of London, such as Bayswater and Maida Vale, saw a price boom in the last quarter. In these locations, prices reached new highs, with the average price per square foot reaching £1,523.

Sale volumes were up 27.2% compared to Q1, which Coutts says could just be the start of the market hotting up.

Across prime London markets there are currently 896 deals under offer, up 12% from the previous quarter.

The super prime market has continued to perform well, according to Coutts.

Transaction volumes for homes worth £10m or more increased by 30% compared to last year. Kensington, Notting Hill and Holland Park dominated with almost half (47%) of all super prime sales taking place in this area.

The strength of the sterling relative to the dollar, in conjunction with the fall in house prices since the market peaked in 2014, means dollar buyers in certain parts of the capital are managing to secure a 44% discount on 2014 prices, bolstering the appeal of luxury homes in the capital.

Coutts Real Estate Investment Team director Katherine O’Shea says: “Buyers that were hesitant to move in 2023 due to high interest rates and inflation, are being lured back into the prime property market, increasing demand in key areas.

“Though the market has struggled to recapture the peak seen in 2014, there has been some price growth since the pandemic. Buyers are still negotiating big discounts but that is starting to come down, suggesting there is more competition coming into the market.”