Sales of top-end homes were falling even before the stamp duty hike announced for £2 million properties in this week's Budget, Land Registry figures showed today.
The report said sales of houses worth more than £2 million dropped by 18% year-on-year in December in England and Wales, the latest month for which the figures are available.
A 7% stamp duty rate was imposed on homes in this bracket in this week's Budget, causing estate agents to warn that some property chains will crumble as a result, with the effects felt across the market.
There were 103 homes sold for more than £2 million in December 2011 and 80 of them were in London, an area which has been helping to keep average house prices up, with strong interest from overseas buyers.
The study also showed that house prices increased 0.1% month-on-month to £161,588 in February, following a stronger 1.1% jump the previous month.
Six regions achieved monthly rises and four saw falls, with drops in the North West, the East, Yorkshire and the Humber and the North East.
However on a year-on-year basis, only London, the South West and the South East recorded increases, with an annual price decrease of 0.6% seen across England and Wales.
Ed Stansfield, chief property economist at Capital Economics, said the Land Registry's figures were generally "reassuring" given a report released by the British Bankers' Association today, which showed that the number of mortgage approvals for house purchase have fallen back sharply.
He cautioned that in short-term house price changes are "very volatile" on a regional basis and a longer-term "North/South divide" could be emerging, with the gap increasing this year.
The house price gap will eventually stabilise as the relative strength of labour markets in the South comes to an end, he said.
Wales recorded the strongest month-on-month house price rise, with a 2% increase, pushing the average sale price to £117,927.
London, which has had strong interest from overseas buyers, had the next highest monthly rise at 1.4% and the strongest year-on-year increase at 4.2%, with homes in the capital typically selling for £354,300.
The North West was hit by the biggest annual price fall, with a 3.5% drop taking the typical price to £110,931, while the North East recorded the most significant monthly price fall with a 2.6% drop to average £99,385.