Official statistics reveal that Westminster has suffered the steepest fall in the capital, with the average house price dropping by £291,000 over the year to June 2026. The price fell from £1,145,000 in June 2025 to £854,000, a 25.4 per cent decline, marking ten consecutive months of falls driven mainly by Inner London.
Within Westminster the fall varied by property type. Terraced homes lost 23.4 per cent in average price, while flats fell 25.7 per cent. In June 2026 the average price of a detached house stood at £3,687,000, a semi‑detached at £2,581,000, a terraced at £1,548,000 and a flat or maisonette at £758,000.
For properties bought with a mortgage the average price in June was £837,000, a 25.2 per cent drop from £1,119,000 a year earlier. First‑time buyers paid an average of £766,000, 25.3 per cent less than the £1,025,000 recorded a year before.
Other London boroughs also saw notable declines. Kensington and Chelsea recorded a 14.7 per cent fall, a reduction of £216,000 to £1,250,000. Hammersmith and Fulham fell 13.3 per cent, losing £111,000 to reach £726,000. Tower Hamlets dropped 13.1 per cent to £457,000, Islington fell 8.1 per cent to £673,000, Camden slipped 7.1 per cent to £833,000 and Wandsworth declined 5.2 per cent to £680,000.
Across the whole of London average house prices were down 2.5 per cent over the 12 months to June 2026, after a 3.1 per cent decline to May. At the same time rents rose by about 3 per cent over the year to July, following a 2.2 per cent increase the month before.
Nationally the average annual house‑price growth slowed to 2 per cent in June, down from 3 per cent the previous month, with the average price at £272,000.
The Labour government has announced a proposal for a mansion tax on residential properties valued at £2 million or more, a measure expected to affect London and the South East most strongly. In parallel the mayor of Greater Manchester has indicated a willingness to raise taxes on wealthier households, a step he says would primarily impact London and help fund a broader economic rebalancing. He also suggested moving a substantial number of Whitehall jobs, including part of the Treasury, to Manchester and establishing a No10 North headquarters there.
Some property experts have expressed doubt about the magnitude of the price declines reported by the ONS, saying they have not observed such steep falls in the market. The head of UK residential research at Knight Frank noted that over the past ten years prime central London prices have fallen by roughly a quarter, attributing the trend to higher stamp‑duty rates, the end of non‑domiciled status, reduced landlord appeal and uncertainty about future wealth‑tax policies, which together are creating a cautious market mood.