London house prices fell again in the latest official figures, extending a run that is now eleven months long while most of the rest of England is still rising. The detail beneath the headline is more useful than the headline itself.
What do the latest official figures say about London?
According to the UK House Price Index for July 2026, published by HM Land Registry on 16 September 2026, the average London home cost £550,000. That is 3.3% lower than a year earlier and 0.1% lower than in June. The release describes it as the eleventh consecutive monthly annual fall for the capital, and London had the weakest annual performance of any English region. In June the annual fall had been 3.1%, so the decline widened slightly.
England as a whole looks very different. The average price was £293,000, up 1.1% on the year, while the UK average was £273,000, up 1.4%. The August figures are due on 21 October 2026, so the numbers here are the latest available, and recent months are provisional and may be revised.
How far apart are London and the rest of England?
The gap in direction is as striking as the gap in price. The North East, the cheapest English region at £167,000, recorded the strongest annual growth at 4.9%. The North West rose 4.4% and Yorkshire and the Humber 3.0%. The South East was almost flat at 0.2%, and the South West slipped 0.2%.
| Region | Average price, July 2026 | Annual change |
|---|---|---|
| North East | £167,000 | +4.9% |
| North West | £221,000 | +4.4% |
| Yorkshire and the Humber | £209,000 | +3.0% |
| South East | £381,000 | +0.2% |
| South West | £302,000 | -0.2% |
| London | £550,000 | -3.3% |
Source: HM Land Registry and ONS, UK House Price Index, July 2026. Rounded as published.
On these figures the average London home costs roughly 1.9 times the English average (£550,000 divided by £293,000 is about 1.88), yet it is the only English region moving in the wrong direction on the year.
Why do the borough numbers matter more than the average?
A single London average blends very different markets. The same release shows Kensington and Chelsea as the most expensive area at £1,232,640 and Barking and Dagenham as the cheapest at £375,604. Of London’s 33 local authority areas, 21 recorded a fall in average prices over the 12 months to July 2026.
The biggest annual declines were concentrated in the central, high-value boroughs:
- City of Westminster: down 20.7%
- City of London: down 17.4%
- Tower Hamlets: down 14.4%
- Kensington and Chelsea: down 14.1%
- Camden: down 10.1%
- Hammersmith and Fulham: down 9.0%
Barking and Dagenham, by contrast, rose 5.3% and Kingston upon Thames 3.3%. Averages for individual boroughs are based on fewer sales and can swing with the mix of properties that happen to change hands, so a fall of this size says as much about which homes sold as about what any one home is worth. That caveat applies with particular force at the top of the market, a theme explored in why prime London property is changing beyond the traditional postcodes.
Are first-time buyers or cash buyers feeling it more?
The index splits London prices by buyer type and by how the purchase was funded. As of July 2026, according to HM Land Registry:
- First-time buyers paid an average of about £467,000, down 4.0% on the year.
- Former owner occupiers paid about £694,000, down 2.3%.
- Cash buyers paid about £585,000, down 4.5%.
- Mortgage buyers paid about £543,000, down 2.9%.
Cash buyers, who tend to buy more expensive homes, therefore saw the steeper fall. The difference in average price between the two groups is about £42,000 (£585,000 less £543,000), though the groups buy different kinds of property, so this is not a like-for-like discount. The first-time buyer figure is the more striking one: a first-time buyer in London is still paying roughly £227,000 less than a former owner occupier, and has seen the sharper annual fall.
Readers should note that the release warns that first-time buyer and former owner occupier figures before January 2026 contain a calculation error, so comparisons across that date need caution.
What is happening to different types of home?
Across England, the index shows a split by property type. Detached homes averaged £474,626 (up 1.4%), semi-detached £292,024 (up 2.7%), terraced £247,081 (up 2.3%) and flats and maisonettes £217,362 (down 3.5%). Flats are the only type falling at national level.
The release gives London-level property type figures only in its wider data tables, and the narrative section does not break them out, so this article does not quote them. Flats make up a far larger share of London’s housing than of England’s, which is one plausible reason why the capital’s average is under more pressure, but that is analysis rather than something the index states.
Illustrative arithmetic: what a 3.3% fall looks like
A fall of 3.3% on a £550,000 average implies a year-earlier average of about £569,000 (£550,000 divided by 0.967). The difference is therefore around £19,000 on paper for the typical London sale. A worked example of this kind describes an average, not any individual property, and the index is built from completed transactions, so it reflects deals agreed some weeks or months earlier.
For an owner who is not planning to sell, a paper fall changes little in the short run. For a buyer, a sale price that has slipped may be offset by borrowing costs and deposit requirements, which the index does not measure. Neither point is a forecast; the index is a record of what has already happened.
What this means for owners, buyers and the wider story
The pattern fits several threads this publication has followed. At the top end, the surcharge on homes worth £2 million or more and wider tax changes have been part of the conversation among owners, while some wealthy households have chosen to rent rather than buy, as covered in why more wealthy buyers are renting instead of owning. The index cannot say which causes lie behind the falls, and anyone claiming a single explanation is going beyond the data. Commercial space tells a related but separate story, covered in what is happening to London’s office market.
Reading the next release with a steadier eye
The August index, due on 21 October 2026, will show whether the run reaches twelve months. A few habits make any new release easier to interpret: compare annual rather than monthly changes, remember that recent months are revised, look at the borough and property type tables rather than the headline alone, and treat any single month as one data point in a longer series.
London’s weakness is real but uneven, concentrated in central, higher-value areas, while outer boroughs such as Barking and Dagenham have been rising. The capital is not one market, and the official figures say so clearly.
This article provides general information, not personalised financial advice. Rules, rates and market data change.
Sources: HM Land Registry; Office for National Statistics; GOV.UK
