Prime central London house prices have fallen by 1.5 per cent year-on-year in July, according to estate agent Knight Frank.

A report on home sales from the company showed Brexit has triggered sellers to make "overdue reductions" to the asking price of their properties.

Knight Frank said: "It is too soon to say what impact Brexit will have on pricing but, in many cases, reductions reflect what would have been an appropriate price before the referendum."

The number of rental transactions in prime central London increased since the Brexit vote - but values have fallen.

Knight Frank said the number of tenancies agreed in the three months to June rose three per cent compared to the same period last year, and viewings were up 15.8 per cent.

However, annual rental prices contracted 3.6 per cent in the year to July, due to higher levels of stock in the capital.

This reflected trends Knight Frank has observed in prime rents in the Home Counties.

Tim Hyatt, head of lettings at Knight Frank, said: "The current lettings market in prime central London is encouragingly stable. We saw a spike in new instructions in the aftermath of the referendum vote, although the number of new applicants registering is slightly down creating an imbalance of supply and demand.

"From a transaction perspective, the level of new deals has remained strong. In particular, the number of corporate enquiries was encouragingly positive as it was dramatically up on last year, highlighting that confidence in London as a capital of choice remains strong."