London’s prime property prices tumble up to £300,000 in a year
June figures reveal steep price declines in London’s most affluent postcodes, sparking debate over whether the market has finally hit bottom.
The Office for National Statistics reported that the average house price across London slipped 2.5 per cent to £554,000 in the year to June, marking the tenth straight month of decline.
Sharp drops in prime boroughs
The fall was far more severe in the capital’s high‑end districts. In Westminster, which covers Mayfair, Belgravia and St John’s Wood, the average price fell 25.4 per cent to £854,000, a loss of £291,000 in just twelve months. Kensington and Chelsea saw a 14.7 per cent slide to £1.25 million, while Hammersmith and Fulham and Camden recorded declines of 13.3 per cent and 7.1 per cent respectively.
Why London is feeling the pressure
Analysts point to a mix of higher mortgage rates, elevated stamp‑duty costs and historically lofty valuations as drivers of the slump. Paige Tao, an economist at PwC, said:
London’s underperformance is more than the mortgage rate story.
She added that “high starting valuations, higher transaction costs and greater sensitivity to international demand mean the capital is having to adjust more than most regions.” Jonathan Hopper, chief executive of property portal Garrington, noted a modest £9,000 month‑on‑month rise in values and suggested the market may have “finally bottomed out”.
Outlook for the market
Property advisers at Knight Frank expect price movement to stay flat for the rest of the year, with any seasonal bounce dependent on how inflation and pre‑Budget tax speculation evolve. Tom Bill, head of UK residential research, warned that “a seasonal bounce in activity may be more detectable in autumn than it was in spring as rates stabilise, but that will also depend on the extent of any pre‑Budget speculation.”
Meanwhile, broader UK data shows a modest 2 per cent rise in average house prices to £272,000, a slowdown from May’s 3 per cent gain, underscoring the capital’s unique vulnerability. For a deeper look at the macro backdrop, see our analysis of the UK’s growth outlook amid war and tax concerns here.
