Strutt & Parker says that a wobble in the central London market is being caused by uncertainty over next year’s General Election and the possibility of a mansion tax.

The firm said there was a 17.2% slide in the number of “cheaper” house sales – those below £2m – in the second quarter of this year.

While sales above £5m rose, there was also a slight drop in transactions between £2m and £5m.

Overall sales were down by 8% compared with the previous quarter.

Stephanie McMahon, head of research at Strutt & Parker, said the drop in below £2m sales had come as a “surprise”.

She said: “Those buying around the £2m mark are becoming increasingly nervous of the election in ten months’ time.”

Andrew Scott, head of London Residential, said: “The effects of the election are clearly being felt across the market.

“As usual, everyone is wondering if this is the start of some big slide that will see billions wiped off values overnight.

“Contrary to what the nervous might think, I have seen London getting stronger and more sought-after over the past 30 years, so panic not – it is just an election.”