London house prices fell 3.1 per cent in a year, recording the largest annual decline of any region as UK prices saw their biggest yearly drop in three years.
Across the UK, the average property price in October was £296,285 — down 1.2 per cent from the previous year and £1,882 lower than in September.
The drop marks the largest annual decline in UK house prices in three years, highlighting continued strain in the property market amid high borrowing costs and economic uncertainty.
London recorded the largest annual decline at 3.1 per cent, with the average property now priced at £524,892.
Other regions also saw year-on-year drops, including the South East and South West (both down 2.4 per cent), and Eastern England (down 2.3 per cent).
Andrew Asaam, mortgages director at Lloyds, said: “Housing demand is currently being tested by a challenging economic backdrop.”
He said: “Renewed inflationary pressures, driven in part by the conflict in the Middle East, are keeping borrowing costs high and adding to the squeeze on household finances, making some buyers understandably more cautious.”
Mr Asaam added: “However, it’s important to put October’s fall in context. House prices have changed relatively little over the past couple of years, as the market has gradually adjusted to higher interest rates.”
He said: “The recent rise in energy and other household costs has added to the pressure on buyers, so some adjustment in prices is not surprising.”
Despite the decline, Mr Asaam said Lloyds does not expect a prolonged downturn in the housing market.
He said: “Looking ahead, conditions are likely to remain subdued in the near term, but we don’t expect this to lead to a sustained period of falling house prices. With wages continuing to rise faster than property prices, the gap between earnings and house prices should gradually narrow, helping affordability to improve over time.”
The figures follow earlier data showing Tower Hamlets as the cheapest borough in London, with an average price of £455,200, and come as a £2.7 million Wetherspoons pub prepares to open at Piccadilly Circus.
