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That’s according to a study by pricemonitors Hometrack.

They've found that the average house price in the capital has fallen by almost 10 per cent in the last year. That’s compared to just 8.1 per cent across the country.

The average property in the borough is now worth just under £144 thousand - after a drop of 10.8 per cent in the last year.

An average property in Havering will cost you £188 thousand - a drop of 9.6 %, while a typical place in Redbridge is valued at £238 thousand - a drop of 9.1%.

The average fall in house prices across the capital is slightly less at 9.6 per cent.

It means that in the capital’s four cheapest boroughs the average property price now stands below the £175,000 stamp duty threshold.

The lowest of these is Barking and Dagenham, which has an average of £143,900. A year ago only Barking and Dagenham was below the threshold.

The biggest fall in cash terms was in Kensington and Chelsea, where average prices fell by £11,400 over the past four weeks, and the biggest percentage drop was in Hackney, where two per cent was wiped off house prices.

The biggest annual fall, one of 14.1 per cent, was in Merton, while Sutton fell by 12.2 per cent.

Expert have warned that London's property market was could fall up to 20 % more next year.

Seema Shah, who is a property expert at Capital Economics, said: "Over the past few months, the pace of house price falls in London has intensified, which is not surprising given the large scale City job losses and growing expectation of sharp cuts in City remuneration.

She continued: "in addition, in the top end of London's housing market transactions of homes priced over £2 million were 53% lower this August than in August last year".

"Buyer confidence is almost certain to be depressed further as the economic downturn gathers pace and we expect house prices to fall a further 20 per cent in 2009."
Howard Archer, analyst at IHS Global Insight said: "Credit conditions remain tight, while affordability, especially in London, is still poor.

"Unemployment is rising fast, income growth is muted and there is widespread expectation of further house price falls and recession.
"We expect house prices to end the year 14.5 per cent lower than they started, and a further 15 fall to occur in 2009.

"A reduced fall of five per cent in the first half of 2010 may then be followed by a period of stability," he added.

Richard Donnell, director of research at Hometrack, said: "The market has been stripped back to the bare bones in terms of sales numbers: "Mortgage rates remain relatively high and are rarely available for more than 75 per cent of the value".