Property prices in London have continued to fall as the slump in value intensifies, according to a leading property consultancy.

The price drop accelerated in June and properties in the capital are now worth 1.7 per cent less than they were in May, said Knight Frank.

Amounting to a loss of 3.1 per cent in value over the last three months – the largest quarterly fall since 2002 - the trend is expected to continue.

Liam Bailey, head of residential research at Knight Frank, said: "Property prices in Prime Central London will continue to fall for the remainder of 2008, except at the very top end."

Mr Bailey said that the extent of the decline was dependent on what happened in the wider economy.

He added: "If the chaos continues, a double-digit decline is conceivable."

In terms of the wider economy, the construction industry is suffering as nearly every sector is in decline, according to the Royal Institute of Chartered Surveyors.