London has been pushed off its top spot by Monaco as the most expensive place to buy residential property, with the capital and the home counties suffering some of the biggest price falls in the world.

Monaco is now the world’s most expensive residential market, where prime property is being sold for €50,000 (£47,000, $68,000) per square metre (up 2.1 per cent in 2008), followed now by London, at €28,000 per square metre, and then Manhattan, at €16,500 per square metre (down 4.1 per cent).