The housing market in London’s traditional ‘prime’ market continues to slow as global economic turmoil and tax increases for high-value property conspire to paralyse the top end of London’s property market, but the market is flourishing across other parts of the capital, according to new analysis from Stirling Ackroyd, in the latest London Hubs Tracker.

While the market has slowed in many prime areas of the capital, with prices in the top 25% of London’s property market falling by 2.4% over the past 12 months, the market in the overwhelming majority of the city’s more “normal” neighbourhoods has managed to hold up well – the remaining three quarters of London saw annualised house price growth of 8.2% over the same period.

Kensington saw the biggest annualised fall in house prices at -11.8%, followed by Notting Hill at -10% and Hampstead.

But across the board, house prices in the capital rose by 1.6% during the final three months of 2015, with the average London property now worth £533,000. As a broad average this translates to a 6.6% annualised growth rate for the whole of Greater London.

Out of a total 272 postcode districts in the capital, 47 saw local declines in average property values, with 32 of these districts – or an overwhelming 68% – falling within London’s traditional ‘prime’ top quarter of the property market, based on absolute value.

Andrew Bridges, managing director of Stirling Ackroyd, commented: “Luxury no longer means profit – or at least you can no longer presume so. London’s hugely diverse property market is undergoing a serious readjustment, with the traditional old heart of ‘prime’ London under pressure from many fronts – from a low global oil price and China’s economic slowdown, to stamp duty reform and international fears of Brexit.

“Yet for most of London’s communities, these factors affecting luxury buyers are less important. There are still too few new homes coming onto the majority of the market compared to demand from a growing population – and the majority of the London market is still in tune with, and restrained, by those fundamentals. Anyone who thinks that London property is synonymous with international jet setters is only looking at a very small part of what London has to offer.

“There is also an outwards wave of interest, away from the old peaks of property prices. Within the wider spread of London home buyers, a growing band of increasingly affluent people can no longer afford the most overcrowded traditional areas of ‘prime’ London – and this demographic of professionals are redefining the map of the capital’s up-and-coming locations. New, dynamic parts of London are emerging further east, driven by a less traditionally exclusive but highly aspirational clientele.”