Nationwide reported this week that the house price slide eased last month, but prime property appears to be faring worse than the mainstream. The latest Knight Frank data reveals that prices fell 1.7 per cent in June, adding to a quarterly decline of 3.1 per cent, the worst since 2002. The worst affected part of the market is that of homes priced under £1 million, for which buyers tend to be dependent on mortgage finance (loan approvals are down 28 per cent in a month to a record low of 42,000, the Bank of England says). It's not all gloom, however. Last week Savills reported that the market for the very finest homes is proving immune, an observation shared by Knight Frank. Liam Bailey, the latter's head of research, says: “The market for super-prime properties worth over £10million is relatively untouched by the gloom elsewhere, driven by international buyers enriched by the commodities boom.”

Yolande Barnes, of Savills, also suggests that this market downturn may follow a traditional form: prime homes will fall in value but when the market turns they will recover more quickly.

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