Key facts
- House prices in London's wealthiest boroughs have fallen significantly, with some areas seeing drops of up to £300,000 year-on-year.
- The average house price in Westminster fell by 25.4% to £854,000 in the year to June.
- Kensington and Chelsea saw an average price drop of 14.7% to £1,250,000.
- London's overall average house price decreased by 2.5% to £554,000 in the year to June.
- The rest of the UK experienced a 2% growth in average house prices to £272,000 in June.
House prices in London's most affluent areas have experienced significant declines, with some postcodes seeing values drop by nearly £300,000 year-on-year in June. The overall average house price in London fell by 2.5% to £554,000 in the year to June, a softer decline than the previous month's 3.1% drop.
However, specific high-value boroughs suffered more pronounced falls. Westminster, which includes areas like Mayfair and Belgravia, saw its average house price plummet by 25.4% to £854,000, a decrease of £291,000 in just one year. Kensington and Chelsea experienced a 14.7% slip to an average of £1,250,000. Other boroughs also saw notable decreases, with Hammersmith and Fulham down 13.3% to £726,000 and Camden down 7.1% to £833,000.
This marks the tenth consecutive month of value stripping in the capital's housing market. In contrast, the rest of the UK has seen modest growth, although this slowed to 2% in June, bringing the national average house price to £272,000.
Property experts attribute London's underperformance to a combination of factors, including higher mortgage rates influenced by the Iran war, disproportionately high stamp duty, high starting valuations, and greater sensitivity to international demand. Despite the recent falls, some analysts suggest that prices may have bottomed out, with a potential return of tactical buyers to the market. However, rising inflation and speculation about potential tax hikes are expected to keep prices largely flat for the remainder of the year.