House prices are plummeting at a growing rate in central London, official figures reveal.
The average house price fell by £291,000 in Westminster in the year to June, according to the data from the Office for National Statistics.
The drop was a startling 25.4%, from £1,145,000 in June 2025 to £854,000 earlier this summer.
The sharp fall in property prices comes after the Labour government unveiled plans to impose a “mansion tax” on homes worth £2 milion or more, which wil hit London and the South East hardest.
New Prime Minister Andy Burnham has more recently signalled that he may raise taxes on the better off, which would impact most on the capital, to ease the cost of living for millions of other families and fund his plans to rebalance Britain’s economy.
He is planning to move hundreds, if not thousands of Whitehall jobs out of London, including part of the Treasury to his No10 North headquarters in Manchester.
Some property experts questioned the scale of the home price drops in the ONS figures, saying they were not seeing such sharp declines.
But the ONS data showed house prices have now fallen for ten months in a row in the capital, mainly caused by the sharp drops in Inner London.
At the same time, rents are rising for many Londoners, up on average 3% across the capital in the year to July, compared to 2.2% a month earlier.
The property price slump in Westminster has picked up, according to the ONS, with the fall in average prices in Westminster increasing from 21.9% in May, 17.5% in April and 9.9% in March.
For homes bought with a mortgage in the borough, the average house price was £837,000 in June, down 25.2% from £1,119,000 a year ago.
The average price paid by first-time buyers was £766,000 this June, 25.3% lower than the £1,025,000 a year ago.
The average price for terraced properties fell by 23.4%, while the average price for flats decreased by 25.7%.
Average prices as of June 2026 in Westminster were:
* Detached properties: £3,687,000
* Semi-detached properties: £2,581,000
* Terraced properties: £1,548,000
* Flats and maisonettes: £758,000
Tom Bill, head of UK residential research at Knight Frank, said: “Prices in prime central London have fallen by a quarter over the last decade, primarily due to higher rates of stamp duty but also the ending of non dom status and the fact it has become less attractive to be a landlord.
“The uncertainty of a Government likely to look again at taxes on wealth and assets in the autumn Budget is adding to the current mood of hesitancy.”
Across London, the average house prices fell by 2.5% in the 12 months to June 2026, compared to a drop of 3.1% in the year to May.
Other boroughs seeing big declines include Kensington and Chelsea with an annual fall of 14.7%, a drop of £216,000 from £1,466,000 to £1,250,000.
In Hammersmith and Fulham, the decline was 13.3% from £837,000 to £726,000, or £111,000.
In Tower Hamlets, the fall was 13.1% from £526,000 to £457,000, or £69,000.
In Islington, the drop was 8.1%, from £733,000 to £673,000, or £60,000.
In Camden, the average property price went down 7.1% from £897,000 to £833,000, or £64,000.
In Wandsworth, it fell 5.2% from £717,000 to £680,000, or £37,000.
Average annual house price growth across the UK slowed to 2% in June, from 3% the previous month, to reach £272,000.
