On an annual basis, the rate of growth dropped considerably for the month, falling to -4.5 per cent from -1.6 per cent in August.
Knight Frank notes that over the previous two months the rate of price falls had actually been moderating; however, the recent turbulence in financial markets, where so many prime buyers come from, has ignited the pace of the downturn.
Even the super-prime sector (£10 million plus), for so long resilient in the face of the market slowdown, shows prices declining by -1.7 per cent in September.
However, annual price growth in this sector remained high at 11.7 per cent.
Liam Bailey, Head of Residential Research at Knight Frank, commented: "The stock of super-prime property in London is limited, and represents a tangible long-term investment to those who may have lost faith in more abstract opportunities. As a result, we believe that transactions will remain steady, and we do not expect a significant price fall in this sector.
Despite the intensifying of falls across the prime sector, those properties priced under £1 million actually fared better in September, recording the smallest drop since March.
And due to a vast undersupply of family accommodation in central London, houses have held up and managed to almost maintain their value, with year-on-year declines of just -1.1 per cent.
In contrast, the average value of flats has fallen by -6.7 per cent over this time.
Knight Frank also notes that Mayfair, Marylebone and St Johns Wood which are home to typically larger-sized properties, have experienced some of the most moderate price falls in the Capital.
