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London house prices continue to fall in boost for buyers

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House price growth in London continued to decline in December, with properties on the outskirts of the capital seeing the biggest falls, according to new analysis from Zoopla. 

Overall, annual London house price growth fell 1.5 per cent this month, with the average price tag of £536k. This is down from a 3.4 per cent fall in the same period last year. 

Boroughs located on the outer edges of London saw the most dramatic falls over the past four weeks. Zoopla said this was because prices in these areas went up quicker over the pandemic than inner London.

In Croydon, house prices fell 3.5 per cent, and in Bromley prices fell by 3.5 per cent. 

Richard Donnell, executive director of research at Zoopla, said: “House price falls are greatest in outer London areas and the commuter belt as prices went up quicker over the pandemic than inner London. 

“House prices in outer London are adjusting more to the impact of higher borrowing costs as prices weaken off a higher base.”

Inner London boroughs are seeing smaller decreases in year-on-year price changes – with Canada prices up 0.3 per cent.

It comes as earlier this week, the ONS said London saw the largest fall in house prices in October – sinking 3.6 per cent, meaning around £16,000 was slashed from the average property. 

London estate agent Chestertons forecasts that UK house prices will experience a slight decline of 0.3 per cent  over 2024, while London prices will show growth of 1.8 per cent due to the “higher number of cash buyers that are less affected by the higher interest rates”. 

Matt Thompson, head of sales at Chestertons, said: “The prospect of a slightly stronger economic outlook from 2025 feeds through to a more meaningful uplift in house prices. 

“The agency forecasts that this will result in growth of between 3.5 per cent and 4.5 per cent across London and the UK. However, any house price growth is more likely to be slow and steady rather than spectacular.”