House prices are dropping in London – and will be followed by a slump across the UK

The mansion tax hasn’t happened yet, but fears that Rachel Reeves will bring one in have already hit the upper end of the London property market, and the effect of that will be to cause a slump in prices across the rest of the UK.

The big change in the capital is the fall in the number of properties being sold in the prime areas. Sales volumes are falling everywhere, but the biggest declines are in six boroughs. In Mayfair, where the average sale price is £1.5m, transactions are down 60 per cent. In Chelsea it’s 47 per cent down, Belgravia 44 per cent, Westminster 28 per cent, Hampstead 23 per cent, and Kensington 21 per cent. As for prices, they have been broadly flat across the capital as a whole, but down 3.8 per cent in central London.

All this has happened before the recent rumour