Six of London's 10 most expensive boroughs have recorded moderate house price growth in the past 12 months as buyers at the top end of the market adjust to the uncertainty caused by tax changes and last year's Brexit vote.
The three highest priced boroughs, where average homes cost more than £860,000, showed an increase in sold prices in a market that has been overshadowed by successive stamp duty changes that cooled sales of the most expensive homes.
The City of Westminster, which takes in Paddington, Bayswater, and Marylebone, saw average prices rise 8.7 per cent to just over £1 million, according to the latest house price index from the Office for National Statistics.
The "Chiltern Firehouse effect" means Marylebone remains steadily popular with buyers, while eagerly anticipated Crossrail links, due to launch in Paddington next year, have triggered a second wave of regeneration in the area to counter London's continued eastward shift.
“Investors are looking for areas with infrastructure improvements they can unlock, as areas of regeneration will support any underlying London growth figure," said Lucian Cook, director of residential research at Savills.
Kensington and Chelsea remains the most expensive borough, with an annual increase of 6.6 per cent that has taken average house prices in the area that covers Kensington Palace, King's Road and Notting Hill to £1.4 million.
However, house price growth across London is at its slowest rate in five years, with the average price rising by 1.5 per cent to £472,000. Prime London boroughs have seen prices stagnate since 2015 due to stamp duty changes, political uncertainty and successive years of double-digit growth, which stretched affordability even at the top end of the market.
Some of London's more expensive boroughs also recorded price falls this month. In the City of London, prices fell 6.4 per cent to £744,000, while Islington recorded a fall of 4.8 per cent to £615,000.
"Increased exposure to capital gains tax for international buyers cooled the prime central London market, while Brexit uncertainty compounded this effect across the prime London market as a whole," said Cook.
"The unexpected June 8 election will compound the uncertainty, but is unlikely to alter market dynamics significantly."
"The market will adjust to whatever tax environment it faces [...] That should set the platform for greater optimism and a return of more consistent price growth."