Homeowners in London are being advised to prepare for further house price reductions, with new research suggesting the capital will remain the weakest performing housing market in the UK. Analysis by House Buyer Bureau indicates that average London house prices could fall by nearly £5,000 before the end of 2026, continuing a trend that has seen values decline over the past year.
According to the firm's review of the latest UK House Price Index data, London stands out as the only region to have experienced a negative average monthly rate of house price growth over the last 12 months. While house prices across England have seen an average monthly increase of 0.3%, values in London have consistently fallen by 0.2% each month. The South East, by comparison, has remained largely flat.
Projecting current trends, House Buyer Bureau forecasts that the average London property price will decrease from £552,655 to £547,889 by the close of 2026. This represents a decline of £4,766, or 0.9%. Should this forecast materialise, the average home in the capital would be almost £21,000 below its recent peak of £568,801, which was recorded in July 2025.
In contrast to London's softening market, other UK regions have shown more resilience. The North East recorded the strongest average monthly house price growth over the past year, at 0.8%. This was followed by Yorkshire and the Humber and the North West, both experiencing a 0.6% monthly increase. This regional divergence highlights a fragmented national market, with affordability and demand dynamics playing out differently across the country.
Chris Hodgkinson, Managing Director of House Buyer Bureau, noted that the property market has largely stagnated across most of Britain over the last year, with minimal growth. However, he emphasised that London is a clear exception, where prices continue to trend downwards. He suggested that unlike previous cycles, the London market appears to have “run out of steam,” with a period of decline not immediately followed by a return to growth. For London homeowners looking to sell, the emphasis is increasingly on securing a swift and certain sale, rather than holding out for higher prices that may no longer be achievable.
The current climate poses challenges for first-time buyers in London, who may see a slight easing in entry costs, though high mortgage rates still present a significant hurdle. Existing homeowners in the capital might face reduced equity, impacting remortgaging options or plans to move. Landlords could also see a dip in asset values, although rental demand often remains robust in a stagnating sales market. The broader context of interest rates and the Bank of England’s monetary policy continues to influence mortgage affordability across the UK, impacting buyer sentiment and market activity.