Nikka Sulton

Property prices have dropped across much of London, with one borough recording an annual decline of more than £190,000 in its average house price.

The latest figures from the UK House Price Index show that 22 of London’s 33 local authority areas experienced falling property values in the year to August 2026.

Data published by HM Land Registry and the Office for National Statistics (ONS) highlights how the capital’s housing market continues to underperform compared with the wider English market.

Average house prices in London fell by 2.2% over the year, while England recorded an increase of 0.4%.

The average London property is now worth approximately £554,000, around £15,000 below the peak of £569,000 recorded in July 2025.

However, the falls have varied considerably between boroughs, with several central London areas experiencing particularly sharp declines.

London’s Biggest House Price Falls

The City of London, Westminster and Kensington and Chelsea recorded the largest annual percentage drops.

In Westminster, the average property price fell from £1,035,221 in August 2025 to £887,206 a year later. This represents a 14.3% decline, or roughly £148,000.

Despite the fall, Westminster remains one of the capital’s most expensive locations for property buyers.

Kensington and Chelsea experienced an even larger financial drop. Average prices decreased by 13.8%, falling from £1,396,156 to £1,204,072. This represents a reduction of more than £192,000 in just 12 months.

The borough remains London’s most expensive place to buy a home, despite recording one of the steepest declines.

Other London Areas See Significant Declines

The price reductions have not been limited to the capital’s most expensive neighbourhoods.

Tower Hamlets, which includes areas such as Canary Wharf, Poplar and Bethnal Green, recorded a 13.3% annual fall. Average property prices dropped from £516,563 to £447,950.

Camden also experienced a substantial decline of 10.6%, with average values falling from £893,099 to £798,486.

In Islington, prices decreased by 8.6%, bringing the average property value down to £654,286.

Outer London Boroughs Also Affected

Several areas outside central London have experienced falling property values, although the declines have generally been smaller.

Barnet recorded a 4.4% drop, taking its average house price to £592,892. Redbridge saw prices fall by 2.8% to £484,378.

Property values in Greenwich decreased by 2.2% to £462,868, while Croydon recorded a 1.5% fall, bringing its average price to £396,718.

Bromley experienced a more modest decline of 0.5%, with the average property now costing £520,253.

However, some outer London areas continued to record growth. Bexley saw prices increase by 1.9%, while Havering recorded a 1.1% rise.

Which London Boroughs Recorded House Price Growth?

Despite falling prices across 22 local authority areas, nine boroughs recorded annual increases, while two saw little change.

Kingston upon Thames experienced the strongest growth, with average property prices rising by 4.9% to £597,587.

Barking and Dagenham followed with a 4.7% increase, taking its average property price to £369,881.

Despite this growth, Barking and Dagenham remains the cheapest London borough in which to buy a property.

Why Are London House Prices Falling?

Government figures suggest that the performance of the flat market is a major factor behind London’s overall decline.

The average price of flats in the capital fell by 5% in the year to August 2026. By comparison, house prices increased over the same period.

Flats account for approximately half of all property sales in London, compared with around one-fifth across Great Britain. This larger share means falling flat prices have a greater influence on the capital’s overall house price figures.

The latest data also indicates that the annual decline in London house prices has eased slightly. Prices fell by 3.2% in the year to July 2026, compared with a 2.2% decrease in the year to August.

What Could Happen Next?

The official figures confirm that property prices have fallen across much of London, but they do not establish whether the downward trend will continue.

The UK House Price Index is based on completed property sales, meaning it reflects transactions that have already taken place rather than current asking prices. The August 2026 figures are also provisional and could change as further sales are registered.

For prospective buyers, the data provides an insight into how property values have changed across the capital over the past year.

Homeowners should remember that borough-wide averages do not necessarily reflect the value of an individual property. Factors such as location, size, condition and property type will all influence how much a home is worth.