Experts are convinced that changes in Stamp Duty has affected London's high-value properties that are valued at more than £938,000, causing the dramatic 25% drop in property values, The Wharf reports.
This dramatic drop is being associated partly to modifications in stamp duty which begun at the end of 2014.
With the overhaul of the system, homes with prestigious postcodes costing more than £938,000 are now taxed more which somehow caused the slowdown of the booming market.
Based on the data gathered by data provider LonRes, there was a slight decrease in the total value of houses and flats sold in prime central London such as Belgravia and Chelsea for the year, 24.5% behind last year's total value, to be specific.
Considering the numbers, it can be said that the average prices dropped by 1.4% in the rich areas.
Aside from the overhaul of Stamp Duty, other external factors are also believed to have caused an impact, such as oil prices as well as adjustments to 'non-doms' legislation - for those residents who are mainly based outside Britain.
According to Anthony Payne of LonRes, "The top end of the market in the last few years has been reliant on foreigners, but a series of things are affecting them that are out of the government's control - the strength of the pound, the weakness of the oil prices, the state of Chinese markets," he told the FT website.
"Those people who were awash with cash don't have as much cash to spend."
Comparing this year and previous year's prices per square foot in Prime central London, there is a slight drop at £1,839 in 2014 to £1,813 in 2015.
Meanwhile, for Marylebone and Camden, prices are almost static (from £1,286 to £1,287 a square foot).
Both areas saw a drop in sales, with Prime central London dropping 30.5% at more than £5m.
