House prices in London’s most expensive areas are plummeting, sparking fears of a domino effect of house price falls across the UK, according to the latest data from Home.co.uk, which found that six out of ten of the most expensive areas in London have falling prices.

Average sales prices fell by 8% in Belgravia over the 12 months to September 2014. Over the same period, prices fell in Westminster by 6.3%, in Soho by 5.7%, in South Kensington by 4%, in Chelsea by 3.5% and in Charing Cross by 2.7%.

Tightening mortgage credit in the wake of the Mortgage Market Review as well as an increase in supply are among key factors in this price drop in the capital’s most expensive, and arguably most overheated, property markets.

House price inflation is now cooling across all of Greater London. Across the capital region, the average asking price fell by 0.1% between August and September whilst average prices rose by just 0.2% across England and Wales. Thus far, only the most expensive parts of London are suffering serious price deflation, but it may well spread.