According to Knight Frank’s latest Prime Central London Index, residential house prices in the region grew by just 0.1% in March. However, annual growth still stands at 20.4% compared to March 2007.

Sales volumes across prime Central London have also fallen by 20% year-on-year during the first quarter of 2008.

Liam Bailey, head of residential research at Knight Frank, said: “The pattern of slower monthly growth rates seen over the last five months continued into March with our prime Central London index recording near even growth of just 0.1%, the same level as November 2007. This slowdown was also reflected in our quarterly figure which showed prices of properties in this sector, the traditional flagship for the UK property market, increasing by only 1.8%.

“Although our index showed that property in prime Central London increased in value by 20.4% in the year to the end of March, the overall trend is one of steady decline in growth. The explanation for this pattern of weakening growth is to be found in the continuing pressure being felt in the international money markets; a problem compounded by problems at various financial institutions on both sides of the Atlantic in recent weeks. However, it also reflects growing fears for job security in the City. This was given added emphasis by a forecast from the CBI that predicted 10,000 jobs in the financial services industry could be lost in the next three months; a sector that is the historic driver for the prime Central London housing market.”