London’s housing market has entered a visible correction phase, with official UK House Price Index (UK HPI) data confirming a -1.0% annual decline across the capital in the 12 months to December 2025. While headline narratives focus on falling values in prime central boroughs, the underlying data reveals a more complex picture.
Across London, property performance is now highly fragmented. Inner London markets such as Westminster, Kensington and Chelsea, and Camden have recorded double-digit percentage declines, reflecting pressure at the top end of the market. At the same time, several Outer London boroughs (including Bromley, Havering, and Waltham Forest) continue to show positive annual growth, driven by relative affordability, family housing demand, and changing buyer priorities.
This divergence highlights a structural shift in London’s housing dynamics rather than a uniform downturn. For buyers, investors, and developers, the key question is no longer whether London prices are rising or falling, but where value is holding and where it is being lost.
Across London, property performance is now highly fragmented. Inner London markets such as Westminster, Kensington and Chelsea, and Camden have recorded double-digit percentage declines, reflecting pressure at the top end of the market. At the same time, several Outer London boroughs (including Bromley, Havering, and Waltham Forest) continue to show positive annual growth, driven by relative affordability, family housing demand, and changing buyer priorities.
This divergence highlights a structural shift in London’s housing dynamics rather than a uniform downturn. For buyers, investors, and developers, the key question is no longer whether London prices are rising or falling, but where value is holding and where it is being lost.
While London’s housing market is widely described as declining, evidence shows that prime central borough corrections and sustained outer-borough demand are driving a two-speed market where prices are falling overall but rising locally.
UK House Price Index December 2025: London Borough Price Changes Explained
According to the UK House Price Index (UK HPI) for December 2025, published by HM Land Registry and the Office for National Statistics, the average London property price was approximately £551,294, representing an annual change of -1.0% compared to December 2024. This made London the only English region to record a negative annual price movement, with the South East remaining flat at 0.0% and all other regions showing positive growth.
At borough level, the same dataset shows a clear divergence. Outer London authorities such as Bromley (+6.8%), Havering (+5.4%), Waltham Forest (+3.3%), Lewisham (+3.7%) and Redbridge (+2.0%) recorded annual price increases. In contrast, central boroughs experienced significant declines, including City of Westminster (-14.8%), Kensington and Chelsea (-11.5%), Camden (-11.1%), Tower Hamlets (-10.9%) and Hammersmith and Fulham (-9.5%).
All figures are based on provisional estimates and are subject to revision as additional transaction data is incorporated within the UK HPI’s 13-month revision window. Borough-level data may also exhibit volatility where transaction volumes are low, particularly in smaller markets such as the City of London.
According to the UK House Price Index (UK HPI) for December 2025, published by HM Land Registry and the Office for National Statistics, the average London property price was approximately £551,294, representing an annual change of -1.0% compared to December 2024. This made London the only English region to record a negative annual price movement, with the South East remaining flat at 0.0% and all other regions showing positive growth.
At borough level, the same dataset shows a clear divergence. Outer London authorities such as Bromley (+6.8%), Havering (+5.4%), Waltham Forest (+3.3%), Lewisham (+3.7%) and Redbridge (+2.0%) recorded annual price increases. In contrast, central boroughs experienced significant declines, including City of Westminster (-14.8%), Kensington and Chelsea (-11.5%), Camden (-11.1%), Tower Hamlets (-10.9%) and Hammersmith and Fulham (-9.5%).
All figures are based on provisional estimates and are subject to revision as additional transaction data is incorporated within the UK HPI’s 13-month revision window. Borough-level data may also exhibit volatility where transaction volumes are low, particularly in smaller markets such as the City of London.
1. London House Prices Fall 1.0% — Weakest Regional Performance in the UK
The UK House Price Index (UK HPI) for December 2025 confirms that London recorded an annual house price fall of 1.0%, with the average property valued at approximately £551,294. This marks a clear shift in the capital’s market performance, with London becoming the only English region to record a negative annual change over the 12-month period.
While other regions across England continued to show growth—led by the North East and North West—London’s decline highlights a distinct divergence in market conditions between the capital and the rest of the UK. The South East recorded 0.0% growth, effectively flat, while all other regions remained in positive territory.
This positions London as the weakest performing region nationally, following several years of sustained price pressure driven by affordability constraints, higher borrowing costs, and reduced transactional activity in higher-value segments of the market.
Despite the overall decline, the headline figure masks significant variation within London itself. The -1.0% change is an average across 33 boroughs, and underlying data shows that price movements are not uniform, with some areas continuing to record growth while others experience sharper corrections.
The UK House Price Index (UK HPI) for December 2025 confirms that London recorded an annual house price fall of 1.0%, with the average property valued at approximately £551,294. This marks a clear shift in the capital’s market performance, with London becoming the only English region to record a negative annual change over the 12-month period.
While other regions across England continued to show growth—led by the North East and North West—London’s decline highlights a distinct divergence in market conditions between the capital and the rest of the UK. The South East recorded 0.0% growth, effectively flat, while all other regions remained in positive territory.
This positions London as the weakest performing region nationally, following several years of sustained price pressure driven by affordability constraints, higher borrowing costs, and reduced transactional activity in higher-value segments of the market.
Despite the overall decline, the headline figure masks significant variation within London itself. The -1.0% change is an average across 33 boroughs, and underlying data shows that price movements are not uniform, with some areas continuing to record growth while others experience sharper corrections.
While London recorded a 1.0% annual decline in house prices to December 2025, the key question for investors and buyers is whether this correction will continue into 2026. A deeper analysis of interest rates, affordability pressure, and transaction volumes suggests that further downward pressure may persist in certain segments of the market. Our detailed outlook explores this scenario in Will London House Prices Fall More in 2026? including the factors most likely to influence price movements over the next 12 months.
2. Where London House Prices Are Still Rising — Top 10 Boroughs by Growth
While London’s overall market declined in 2025, the data shows that growth has not disappeared, it has simply shifted location. A group of outer and more affordable boroughs continue to record positive annual price increases, reflecting sustained demand for family housing, relative affordability, and changing buyer priorities across the capital.
While London’s overall market declined in 2025, the data shows that growth has not disappeared, it has simply shifted location. A group of outer and more affordable boroughs continue to record positive annual price increases, reflecting sustained demand for family housing, relative affordability, and changing buyer priorities across the capital.
| Rank | London borough | Dec 2025 avg price | Dec 2024 avg price (revised) | Annual % change |
| 1 | Bromley | £535,306 | £501,178 | +6.8% |
| 2 | Havering | £452,231 | £429,195 | +5.4% |
| 3 | Lewisham | £493,356 | £475,652 | +3.7% |
| 4 | Waltham Forest | £525,738 | £509,168 | +3.3% |
| 5 | Sutton | £453,058 | £445,047 | +1.8% |
| 6 | Southwark | £589,636 | £580,377 | +1.6% |
| 7 | Ealing | £575,503 | £566,203 | +1.6% |
| 8 | Bexley | £410,346 | £404,910 | +1.3% |
| 9 | Hillingdon | £477,979 | £471,663 | +1.3% |
| 10 | Harrow | £530,409 | £524,958 | +1.0% |
3. Where London House Prices Are Falling — Boroughs with the Largest Declines
At the other end of the market, several high-value central London boroughs recorded significant annual declines, pulling down the overall London average. These areas are typically more exposed to international investment flows, higher-value transactions, and lower sales volumes, making them more sensitive to market shifts and short-term volatility.
As a result, the largest percentage falls are concentrated in prime and inner London locations, highlighting a clear divergence between central and outer borough performance.
| Rank | London Borough | Dec 2025 Avg Price | Dec 2024 Avg Price | Annual Change |
|---|---|---|---|---|
| 1 | City of Westminster | £880,389 | £1,033,867 | -14.8% |
| 2 | Kensington and Chelsea | £1,178,497 | £1,332,149 | -11.5% |
| 3 | Tower Hamlets | £463,527 | £520,073 | -10.9% |
| 4 | Hammersmith and Fulham | £713,773 | £788,951 | -9.5% |
| 5 | City of London | £740,433 | £797,444 | -7.1% |
| 6 | Lambeth | £538,500 | £572,344 | -5.9% |
| 7 | Newham | £405,619 | £428,508 | -5.3% |
| 8 | Barnet | £594,093 | £622,080 | -4.5% |
| 9 | Richmond upon Thames | £777,164 | £802,051 | -3.1% |
For buyers, the variation between boroughs presents both risk and opportunity. While some areas are experiencing double-digit declines, others continue to see steady growth, highlighting the importance of location-specific decision-making rather than relying on London-wide averages.
A practical breakdown of where and how to buy in the current market is provided in London Housing Market 2026: Complete Buying Guide, including affordability considerations, timing strategies, and borough-level insights.
4. “Two-Speed London Market” Analysis
The December 2025 UK House Price Index data highlights a clear two-speed market emerging across London, where outer and more affordable boroughs are recording price growth while prime central locations are experiencing significant declines.
Although London overall recorded a -1.0% annual change, this headline figure masks a strong divergence in performance. Boroughs such as Bromley (+6.8%), Havering (+5.4%), and Waltham Forest (+3.3%) are seeing continued growth, largely driven by comparatively lower entry prices, stronger demand from first-time buyers, and improved mortgage affordability conditions.
In contrast, central boroughs including Westminster (-14.8%), Kensington & Chelsea (-11.5%), and Camden (-11.1%) have seen some of the sharpest declines in the country. These areas are more exposed to high-value transactions, international buyer sentiment, and lower transaction volumes, which can amplify short-term volatility.
This split reflects a broader rebalancing of London’s housing market following several years of high growth. As affordability constraints persist and buyers become more price-sensitive, demand is shifting toward outer boroughs where value is perceived to be stronger.
At the same time, easing mortgage rates and more flexible lending criteria are beginning to support activity, suggesting that while the market remains uneven, underlying demand is returning, particularly in mid-market and commuter-driven locations.
For investors, developers, and construction professionals, this divergence is critical. It signals that London is not moving as a single market but as multiple micro-markets, each responding differently to affordability, financing conditions, and buyer demand.
The December 2025 UK House Price Index data highlights a clear two-speed market emerging across London, where outer and more affordable boroughs are recording price growth while prime central locations are experiencing significant declines.
Although London overall recorded a -1.0% annual change, this headline figure masks a strong divergence in performance. Boroughs such as Bromley (+6.8%), Havering (+5.4%), and Waltham Forest (+3.3%) are seeing continued growth, largely driven by comparatively lower entry prices, stronger demand from first-time buyers, and improved mortgage affordability conditions.
In contrast, central boroughs including Westminster (-14.8%), Kensington & Chelsea (-11.5%), and Camden (-11.1%) have seen some of the sharpest declines in the country. These areas are more exposed to high-value transactions, international buyer sentiment, and lower transaction volumes, which can amplify short-term volatility.
This split reflects a broader rebalancing of London’s housing market following several years of high growth. As affordability constraints persist and buyers become more price-sensitive, demand is shifting toward outer boroughs where value is perceived to be stronger.
At the same time, easing mortgage rates and more flexible lending criteria are beginning to support activity, suggesting that while the market remains uneven, underlying demand is returning, particularly in mid-market and commuter-driven locations.
For investors, developers, and construction professionals, this divergence is critical. It signals that London is not moving as a single market but as multiple micro-markets, each responding differently to affordability, financing conditions, and buyer demand.
The divergence between rising outer boroughs and declining prime central areas reflects broader structural shifts within the London property market, particularly around borrowing capacity and affordability. As mortgage rates stabilise and lending criteria evolve, the trajectory of house prices in 2026 will depend heavily on financing conditions. A detailed breakdown of these drivers is covered in London House Price Forecast 2026: Interest Rates, Demand and Market Direction, analysing how rate movements could reshape buyer behaviour across the capital.
Evidence-Based Summary
London house prices fell by 1.0% annually to £551,294 in December 2025, making it the only English region with negative growth. However, borough-level data shows a split market: while outer boroughs such as Bromley (+6.8%) and Havering (+5.4%) recorded growth, prime central areas including Westminster (-14.8%) and Kensington & Chelsea (-11.5%) saw significant declines. This indicates a two-speed market driven by affordability constraints, shifting buyer demand, and varying exposure to high-value transactions.
Evidence-Based Summary
London house prices fell by 1.0% annually to £551,294 in December 2025, making it the only English region with negative growth. However, borough-level data shows a split market: while outer boroughs such as Bromley (+6.8%) and Havering (+5.4%) recorded growth, prime central areas including Westminster (-14.8%) and Kensington & Chelsea (-11.5%) saw significant declines. This indicates a two-speed market driven by affordability constraints, shifting buyer demand, and varying exposure to high-value transactions.
Image © London Construction Magazine Limited
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Expert Verification & Authorship: Mihai Chelmus
Founder, London Construction Magazine | Construction Testing & Investigation Specialist |
