London Property Prices Plummet Post-Budget: What Homeowners Need to Know
The London property market has experienced a notable downturn, with house prices in the capital falling significantly following recent budget announcements. New analysis indicates that homeowners in London have seen the steepest declines nationwide, with average property values decreasing by almost two per cent – equating to an average loss of £10,541 – between September and October this year.
London Property Market Downturn: Post-Budget Price Drops Revealed
According to the October House Price Index by estate agents Purplebricks, London property values slipped by 1.9 per cent monthly, bringing the average home price in the city to £547,468. The annual decline was even more pronounced, standing at 2.4 per cent.
Out of the capital’s 33 boroughs, 19 recorded a fall in property values. Several areas witnessed substantial reductions, with three boroughs experiencing six-figure losses over the 12 months leading up to October. Kensington and Chelsea, for instance, saw property values drop by £56,975 in a single month and a staggering £236,342 over the year. Despite these significant reductions, properties in this affluent area still maintain an average price of £1,194,726.
The City of London recorded the most substantial monthly price fall, with an average reduction of £68,103, bringing homes in the financial district to an average of £607,399. Westminster, another prominent borough, also suffered considerable losses, with properties shedding £170,763 annually and £30,352 monthly, leaving the average home valued at £889,935.
The National Housing Market Picture
Beyond the capital, the property market displayed a mixed picture. The South West experienced a 0.6 per cent monthly reduction, setting the average property price at £302,526. Scotland saw a similar 0.6 per cent monthly drop, with average homes now costing £191,825.
Conversely, some regions enjoyed growth. The North East recorded a 1.3 per cent monthly increase, pushing average property values to £163,153. Wales also showed resilience, with a 1.1 per cent rise over the last month, bringing the average Welsh home to £210,657.
UK Market Resilience and Expert Outlook
Despite monthly fluctuations in various areas, the overall UK property market registered a 1.7 per cent annual increase – or approximately £5,000 – up to October, with the average UK property now valued at £270,000. Homeowners in the remote Orkney Islands saw the largest annual gains, with prices rising by £37,386 to an average of £242,065. Significant increases were also noted in the Vale of White Horse, Oxfordshire (£33,537 rise to £410,221), and Uttlesford, Essex (£32,263 rise to £492,803).
Tom Evans, Sales Director at Purplebricks Estate Agency, acknowledged that while monthly declines might be concerning for homeowners, a slowdown in house price activity is not uncommon towards the end of the year. He suggested that many buyers and sellers have been hesitant, awaiting clarity on future government housing policies and taxation plans for 2026, particularly concerning higher-value properties and second homes. Despite these concerns, Evans emphasised the housing market’s overall resilience throughout 2025 and expressed confidence in a renewed momentum in the new year.
