Letting agent signs
Property estate agent sales and letting signs are seen attached to railings in London Reuters

House prices in London saw the largest annual drop in almost eight years in April 2017 as the average asking price for homes fell by 1.5% to £636,777 ($813,000) year-on-year, according to a report by property website Rightmove.

This marks the greatest fall in the city's asking prices since May 2009.

Compared to last month's figures, in April London's housing market plunged by 2%.

The sharp decline is mainly due to a rapid drop in the prices of high-end properties located in London's inner areas such as Kensington and Chelsea.

Inner London properties witnessed a year-on-year drop of 4.2%, while outer London properties increased by 1.7%.

The outer borough's performance was more aligned with the 2.2% increase reported for the whole of UK.

The Eastern area of England reported the strongest growth of 5.3%.

The steep drop in property prices around the luxurious inner London boroughs may be indicative of an imminent price correction in the market. Moreover, the looming uncertainty of the UK's Brexit negotiations may be weighing heavily on the sentiments on those looking to invest in properties in London.

Miles Shipside, Director of Rightmove remarked, "While the rest of the country enjoys a spring surge with most regions seeing a price boom and new price records, some parts of the London market are still re-adjusting,"

"The more discretionary upper end of the market is having to tempt buyers with cheaper asking prices, offsetting the higher purchase taxes."

An earlier report by property sale and lettings listing website Zoopla had estimated that property values across the UK fell by £29bn during the first quarter of 2017.