House prices fell in 22 of London’s 33 local authority areas in the year to August 2026, according to new official figures, with some of the capital’s most expensive boroughs recording the steepest drops.
The UK House Price Index, published by HM Land Registry and the Office for National Statistics (ONS), shows the average London property fell by 2.2 per cent over the year, while prices across England as a whole rose by 0.4 per cent.
The average home in London now costs around £554,000, roughly £15,000 below the capital’s peak of £569,000 in July 2025.
Central London saw some of the sharpest falls. In Westminster, the average price dropped from £1,035,221 in August 2025 to £887,206 a year later, a fall of 14.3 per cent worth around £148,000. Even after that drop, Westminster remains one of the priciest places in London to buy a home.
Kensington and Chelsea recorded a 13.8 per cent decrease, with average prices falling from £1,396,156 to £1,204,072, a difference of more than £192,000. The borough remains the most expensive in the capital despite one of the steepest percentage falls.
Tower Hamlets, which includes Canary Wharf, Poplar and Bethnal Green, saw average prices fall by 13.3 per cent, from £516,563 to £447,950. Camden recorded a 10.6 per cent decline, from £893,099 to £798,486, while Islington fell by 8.6 per cent to an average of £654,286.
The falls were not confined to high-end neighbourhoods. Barnet dropped 4.4 per cent to £592,892, Redbridge fell 2.8 per cent to £484,378, Greenwich was down 2.2 per cent to £462,868, Croydon slipped 1.5 per cent to £396,718 and Bromley eased 0.5 per cent to £520,253.
Not everywhere went down. Nine areas recorded increases and two were largely unchanged. Bexley rose 1.9 per cent and Havering 1.1 per cent, while Kingston upon Thames saw the strongest annual growth, up 4.9 per cent to £597,587.
The figures underline how uneven the capital’s housing market has become, with prime central boroughs cooling fastest while parts of outer London prove more resilient. For buyers, the drops in Westminster and Kensington and Chelsea still leave average prices far beyond the reach of most Londoners, but they mark a notable correction from the highs of last summer.
London’s wider market has been under pressure from higher borrowing costs and stretched affordability, and the latest index suggests that pressure is still feeding through into prices, particularly at the top end. Whether the falls spread further or stabilise will depend in part on interest rates and on how much stock comes to market in the coming months.
The figures follow earlier signs of a cooling market in the capital, including previous house-price data reported earlier this year.
