Demand for luxury homes fell over the spring according to today's government figures which show that prices slowed in the South but surged across the North, Midlands and Wales.
The number of properties changing hands for more than £1m in the three months to June slumped by one-fifth to 565 compared with 705 a year ago, the Land Registry said.
Across England and Wales the total number of sales dropped by 16 per cent but London bore the brunt of the drop with the total number of transactions falling by more than a quarter while the most expensive boroughs saw volumes fall by half.
As a result, the value of the typical home in London rose at an annual rate of 6.0 per cent, less than half the average of 12.5 per cent for England and Wales.
Westminster, Hammersmith and Fulham, Islington, Lambeth and Wandsworth, which have witnessed a boom in recent years, all saw prices fall year-on-year.
The fastest growing region was the East Midlands, where prices rose 25.0 per cent, followed by the North on 24.2 per cent, Wales with 23.7 per cent and Yorkshire and Humberside on 22.6 per cent.
The fastest growing area was Ceredigion in west Wales where the price of the average home leapt 40 per cent to £113,353 from £80,989 a year ago.
In contrast areas around London also saw a slowdown, with Surrey rising 8.3 per cent, Oxfordshire up 9.6 per cent, Reading and West Berkshire both up 11.4 per cent.
Housing experts believe high prices in the South - and other major cities such as Manchester and Leeds - have choked off demand, particularly from first-time buyers, leading to stagnation spreading up the property ladder.
As a result homebuyers are taking advantage of low prices in more remote areas combined with the lowest mortgage rates for a half century to snap up a home elsewhere.
The Land Registry report showed that while Greater Manchester, for example, saw prices rise 10.6 per cent, neighbouring Lancashire saw prices rise 26.6 per cent and Cheshire 25 per cent.
The most expensive place to buy remained Kensington and Chelsea where the average home now costs £642,483 followed by the City of Westminster at £459,517.
Blaenau Gwent remains the cheapest with prices actually falling from £41,939 in the second quarter of last year to £41,646.Reuse content