House prices in London dropped at their fastest rate in more than two years last month, new figures from the Land Registry reveal.

The department''s latest report show that prices fell 0.6 per cent in October, the first monthly decline the capital has experienced since April 2006.

While rises in most other regions kept house price inflation at 0.1 per cent for England and Wales, the London data underscores fears of a pending slowdown long-predicted by some analysts.

They warn that the capital is typically seen as being a precursor to national trends, positing that even the UK''s chronic housing shortage cannot sustain the runaway growth of recent times - with house price inflation hitting an incredible 227 per cent since 1996.

Other voices, including the consultancy firm Capital Economics, note that the downturn fails even to reverse the previous month''s 1.3 per cent rise and suggest it is merely a glitch caused by isolated factors such as falling City bonuses.

The average price of a home in the capital is now £351,039, well above the national average of £184,346.