London house prices fell 4.8 per cent between February 2024 and 2023.
House prices across England and Wales decreased by 1.1 per cent, according to the latest House Price Index from the Office for National Statistics, with the capital registering the steepest drop.
London’s dropping house prices has also seen it slide down the global cities ranking this week.
Within London’s many property micro-markets there were some interesting trends, with some boroughs even seeing an increase in house prices.
At borough level, house prices fluctuated between rises of over one per cent and drops of more than 20 per cent.
Hackney bucked the trend with a rise in house prices of 1.3 per cent, the strongest growth in across the entire capital, adding £6,700 to house prices on average.
The average house price is now £589,517 in the popular east London borough.
“Looking back to 2008, Hackney is one of the fastest-growing places in the capital, if not the country, from a price perspective,” said Isaac Odegbami, an analyst at Hamptons.
Brent also saw house prices rise by £6,700 (1.1 per cent), and prices rose £4,300 (0.9 per cent) in Greenwich.
Prime markets in central London continued to see some of the largest drops in house prices.
“Hackney is one of the fastest-growing places in the capital, if not the country, from a price perspective.”
Westminster saw the sharpest drop of 20.8 per cent, knocking almost £240,000 off the average house price.
Kensington and Chelsea, while still the most expensive place in the entire UK to purchase property with an average house price of £1.2 million, saw prices drop 14.1 per cent.
There were below average price falls outside of the prime central market, most markedly in south London.
House prices were down seven per cent year-on-year in Lambeth, taking £37,500 off house prices.
Homes in Merton saw a £38,000 drop (-6.6 per cent) in value, while Lewisham had a £28,000 fall (-6.3 per cent) and Croydon £24,000 (-5.8 per cent).
"Sellers have also been busy and the net result is more choice while prices are up a bit and down a bit.”
Although the data is several months behind the other House Price Indexes, it is generally considered one of the most reliable indicators of what is happening in the property market.
“Of all the housing market surveys, this one is arguably the most interesting, not just because it covers about six times more than the major lenders' transactions but it also includes cash buyers who have supported activity so crucially recently when mortgage payments have been in an uncertain phase,” explained Jeremy Leaf, a north London estate agent.
"Now rates have stabilised and the next move is likely to be downwards, particularly following lower inflation announced today, with demand improving,” he added.
"Sellers have also been busy and the net result is more choice while prices are up a bit and down a bit — a pattern we expect to continue over the next few months."
