London house prices fell by as much as £236,000 over the past year, the latest research by Benham and Reeves has revealed.
Benham and Reeves analysed Land Registry data for December 2023.
Much like the wider UK market, higher mortgage rates stifled buyer demand, causing house prices to cool from the record highs seen during the pandemic market boom.
As a result, the average London house price fell by 5.2% between January and December last year, finishing 2023 at an average of £508,037 – the largest decline of all UK regions.
This decline was at its most prominent across London’s more expensive prime boroughs, with the City of Westminster recording a 20.9% reduction in the average house price throughout 2023 – a drop of £232,015.
In Kensington and Chelsea, the average house price fell by 17.4% (-£236,346), while the City of London saw reductions of 16.6% (-£160,221) and in Hammersmith and Fulham house prices fell by 13.2% (-£101,522).
27 London boroughs saw a reduction in the average house price throughout 2023; however, six bucked the wider trend to record positive movement.
Both Hackney and Lewisham saw marginal increases of 0.7%, along with Islington at 0.8%.
Newham saw a 1.1% increase in the average house price, while in Camden they climbed by 1.6%.
However, Richmond enjoyed the largest boost to house prices, up 2% year on year.
Marc von Grundherr, director of Benham and Reeves, said: “With house prices cooling during the later stages of last year, it’s the London market that has naturally been hit the hardest given the far higher cost of homeownership, with all but a handful of boroughs experiencing a decline.
“Largely speaking, this decline has been marginal in the grand scheme of things and the vast majority of boroughs have only seen slight corrections, with house prices remaining there or thereabouts when compared to the record peaks seen during the pandemic market boom.
“However, the damage done across the prime market, in particular, has been far more pronounced, although the silver lining is, of course, that there’s never been a better time to buy at the very high-end of the London housing market.”
He added: “But rest assured that when the London market does turn, it turns quickly and with interest rates now falling, it’s only a matter of time before the sleeping giant of the UK property market awakens.
“When it does, we expect London property prices to not only rebound, but to once again lead the rest of the UK with respect to the rate of growth seen.”
