The average cost of a home in the capital dipped 1.4 per cent in the month to £496,269, down around £7,000, according to figures from the Land Registry.
That is still 4.6 per cent up on a year earlier, but London’s annual rate of growth is now the lowest for any region in the country.
The biggest rises were in leafier outer London boroughs, where properties are more likely to have outside space.
Prices rose 13.3 per cent over the year to February in Merton, by 11.7 per cent in Sutton, and 11.4 per cent in Ealing.
Nationally, house price inflation accelerated to 8.6 per cent, the highest since October 2014.
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The property market has performed far more strongly than expected since it was opened up after the first lockdown last May.
It has been fuelled by Chancellor Rishi Sunak’s decision last summer to waive stamp duty on the first £500,000 of any sales, a relief worth up to £15,000.
Today’s figures also show how the number of property deals surged to a record high of 190,980 in March ahead of the original deadline for the end of the stamp duty holiday. That was more than double the same month last year.
The deadline has since been extended to the end of June when the tax free band will reduce to £250,000, before dropping to £125,000 in October.
Marc von Grundherr, director of agents Benham and Reeves, said: “While the market isn’t running as hot as other UK regions at present, this should work in the favour of the London market in the long run.
“A far more steady return to form is likely to be made and this will ensure that any crash landing as a result of the stamp duty holiday ending is going to minimised within the capital. ”
The rate of inflation as measured by the Consumer Prices Index rose from 0.4 per cent to 0.7 per cent in March, still well below the Bank of England’s two per cent target.
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