House prices at the top end of the market in central London fell 0.2pc in November, the first drop since October 2010, according to data from Knight Frank.
"Heightened uncertainty" over the outcome of the general election and whether the era of two-party politics is over has put the housing market in reverse in the heart of the capital - recently ranked the most expensive city in the world for homeowners.
November marked the end of a run of growth for properties valued in the top 5pc to 10pc of the market, otherwise known as the prime market, that had seen values climb 73pc in five-and-a-half years.
Price declines were most noticeable in Notting Hill, which suffered a 2.3pc drop, due to weaker demand in the £5m to £10m price bracket - a family home market that is more reliant on domestic demand than other areas of central London.
Elsewhere, prices in South Kensington fell 1.2pc.
There were declines of less than 1pc in Kensington, Islington and Marylebone, while prices were flat in Belgravia, Knightsbridge and Mayfair.
Values in central London are also suffering as Londoners move out of the city, cashing in on high demand over the last year, and buying in the home counties to secure bigger properties at better value.
"It's difficult to rank individual reasons for the decline in order of importance, but anecdotally they appear to include the looming UK general election, the proposals for a mansion tax and the impact of capital gains reform for non-residents," said Tom Bill, head of London residential research at Knight Frank.
"The conclusion must be that prices have softened in prime central London due to the magnitude of the cumulative uncertainty rather that the quantifiable extent of the risks."
A house in central London that was worth £1m on general election day in 1979 when Margaret Thatcher came to power, will cost £27m by May 2015, according to the Knight Frank analysis.