Luxury residential properties in London are selling for 40% of the price they fetched at the peak of the housing boom and are set to fall further, according to estate agents.

Jeremy McGivern, who runs property consultancy Mercury Home Search, bought a Kensington property for a client last week that was 40% below the price it exchanged at last year. He said: "Ultimately many [top] properties will fall more than 50% - there are already examples of this, particularly from forced sellers who need to free up cash."