House prices fell in all but six of London’s 33 local authority areas last year as the capital’s property was hit harder than any other region of the UK by soaring interest rates, new analysis reveals today.
The average London house price dropped by 5.2% in 2023, from £535,711 to £508,037, knocking £27,674 off the value of a typical home in the capital, according to latest Land Registry figures.
That compares with just 1% for the UK as a whole. But within that overall figure, the performance of individual boroughs varied enormously, according to data today compiled by agents Benham and Reeves. Prices fell in 26 boroughs and the City of London with the biggest declines seen in the most expensive neighbourhoods.
The biggest single fall was in Westminster, where the average cost of a home plummeted almost 21%to £877,733.
The loss in value in a single year, £232,015, is close to the average price of a home in many parts of the UK.
In Kensington and Chelsea, the average price fell by 17.4%, or £236,346, while the City of London saw reductions averaging 16.6%, equivalent to £160,221. In Hammersmith and Fulham house prices fell by 13.2%, or £101,522.
However, six boroughs did buck the overall trend to record small increases in prices over the course of a year marked by severe pressure on homeowners as they were forced to remortgage at far higher rates when fixed rate deals expired. Londoners have by far the biggest mortgages of any UK region with the average first time buyer home loan in the capital standing at £335,000.
Richmond upon Thames recorded the biggest rise in property prices with the average up 2% to £15,093.
It was followed by Camden on 1.6%, Newham with 1.1%, Islington (0.8%) and Hackney and Lewisham (both on 0.7%)
Benham and Reeves director, Marc von Grundherr, said: “With house prices cooling during the later stages of last year, it’s the London market that has naturally been hit the hardest given the far higher cost of homeownership, with all but a handful of boroughs experiencing a decline.
Largely speaking, this decline has been marginal in the grand scheme of things and the vast majority of boroughs have only seen slight corrections… However, the damage done across the prime market, in particular, has been far more pronounced, although the silver lining is, of course, that there’s never been a better time to buy at the very high-end of the London housing market.”
The figures came as latest data from property portal Rightmove showed prices starting to recover in the first few weeks of the year after mortgage rates fell sharply at the end of 2023 on hopes that the Bank of England will soon start lowering the cost of borrowing.
According to Rightmove, asking prices jumped 2.8% in London in February.
