House prices in London's most sought-after areas continued to fall in June, with some postcodes experiencing average price drops of nearly £300,000 year on year. The Office for National Statistics (ONS) reported that London's average house price decreased by 2.5 per cent to £554,000 in the year to June.
This decline was softer than the 3.1 per cent fall recorded in May, but certain up-market areas saw more substantial reductions. In Westminster, which includes areas like Mayfair and Belgravia, the average house price dropped by 25.4 per cent to £854,000, a decrease of £291,000 in a single year. Kensington and Chelsea experienced a 14.7 per cent fall to £1,250,000, while Hammersmith and Fulham saw prices decline by 13.3 per cent to £726,000. Camden's average house price fell by 7.1 per cent to £833,000.
The 2.5 per cent drop across London marks the tenth consecutive month of value reduction in the capital's housing market. In contrast, the rest of the UK saw modest growth, with the average house price increasing by two per cent to £272,000, although this was a slowdown from May's three per cent growth rate.
Property experts attribute London's market sensitivity to higher mortgage rates, partly due to the Iran war, and disproportionately high stamp duty. Paige Tao, an economist at PwC, noted that London's underperformance is also influenced by high starting valuations, increased transaction costs, and greater sensitivity to international demand.
Jonathan Hopper, CEO of Garrington, suggested that a recent £9,000 month-by-month growth in London house values could indicate that prices may have "finally bottomed out." However, Knight Frank anticipates that rising inflation and pre-Budget speculation regarding potential tax hikes are likely to keep prices stable until the end of the year.