London house prices recovered a little in the final days of 2023, but still recorded an overall drop of 4.8 per cent in the 12 months to December 2023.
It was a small increase from the six per cent drop recorded in the 12 months to November 2023, but showed prices remain falling.
Only five out of 33 boroughs saw house prices increase last year, according to the Office for National Statistics.
Households saw almost £32,000 taken off the values of their property on average, but this varied greatly between boroughs.
Kensington and Chelsea, the most expensive place to buy property in the capital, also saw the biggest drop in terms of monetary value, with £178,902 slashed from house prices on average (-13.7 per cent).
Other prime central London areas such as the City of London (-17.8 per cent ) and Westminster (-16.1 per cent) recorded steep drops in house prices.
Hammersmith and Fulham saw house prices drop over 10 per cent, knocking £78,653 off the value of homes in the west London borough.
Richmond upon Thames — regularly voted one of the best places to live in the UK — saw £21,936 added to house prices as homes rose 3 per cent in value.
Camden (1.7 per cent) saw £14,804 added to house prices, and Hackney (0.4 per cent) £2,284. Islington (0.1 per cent) recorded a small rise of £831, but a rise none the less.
For London’s first-time buyers, who are still struggling to get on the ladder, outer boroughs are still looking the most affordable.
House prices in Barking and Dagenham dropped four per cent, putting the average price at £340,485 — the cheapest in London.
Bexley, which saw a 7 per cent drop in house prices, now has an average house price of £377,926.
House prices in London dropped further than anywhere else in the UK, which recorded an overall annual drop of 1.4 per cent in the year to December 2023.
Despite the drop in London’s usually buoyant housing market, industry experts said that they could be about to bounce back soon thanks to a high demand for a limited supply of housing and mortgage rates dropping while the Bank of England holds interest rates.
“The volume on talk of house prices having ‘hit the bottom of the market’ is getting louder,” said Anna Clare Harper, CEO of GreenResi.
“Demand from mortgaged property owners fell, but 36 per cent of homes are owned without mortgages. This is the largest part of the housing market and it acts as an anchor, keeping pricing stable when other investments get stormy,” she added.
“What’s more, the supply of homes is constrained. As a result, a significant house price crash remains very unlikely."
