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January 22, 2026
KEY INFORMATION
The average price of a flat in London has fallen by more than 7% since the start of 2023, according to This is Money. However, some areas have seen much sharper falls in that period:
Plus, there’s an added risk to a flat’s value if it was bought as a new build. For example, in Hammersmith and Fulham, two-thirds of all flat owners who previously bought new properties sold at a loss last year, according to analysis of Land Registry data by Hamptons.
However, people selling flat conversions haven’t escaped losses either: nearly one in five flat owners who bought in the last 20 years sold a second-hand flat at a loss last year, Hamptons research found.
Looking back to 2015, buying property in London had seemed like a sound investment, with Land Registry figures showing the average London home rose by 83% from £263,000 to £482,000 between 2009 and 2015.
But since then, house prices in many parts of the capital have barely moved, and some markets now appear to be experiencing a crash.
As a result, many flat owners who bought in London over the past decade now expect to sell at loss, while many house owners may not achieve much more than they paid for their home, even if they bought 10 years ago.
However, these figures are averages and house price drops are not affecting all of London. Speaking to the Financial Times, Tom Bill, head of UK residential research at estate agency Knight Frank, said London was a “two-speed market”, with the prime areas hit by taxes, with stamp duty being higher for more expensive properties, and “more susceptible and sensitive to political risk”.
By comparison, demand has been strongest in more affordable areas of London, such as the boroughs of Havering, Waltham Forest, and Lewisham, where the average house price reached an all-time high last autumn.
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“This report captures the north–south story well. The point isn’t that one part of England is ‘winning’ – it’s that markets move to different rhythms,” says Kevin Shaw at property service group LRG. Many northern markets haven’t been on the same roller coaster as parts of the south. Property prices often rise in a steadier way in the good years, so they tend to fall less when sentiment turns. The temperature is generally more consistent.
“By contrast, the south can overheat – and it can also catch a cold. Higher values can mean greater sensitivity to mortgage rates, affordability and confidence. That can translate into a longer adjustment period, even while demand for the right homes remains resilient.”
Paula Higgins, CEO of the HomeOwners Alliance, says:
“If people hear the phrase house price crash being bandied around it can understandably cause anxiety. For many, a house price crash means something like the 2008 global financial crisis, when UK house prices fell by around 20% between 2007 and 2009. But that isn’t what’s happening today.
“There isn’t a set definition of a house price crash but generally speaking, it means a sudden and significant drop in house prices in a particular market or region.
“According to current data, some may argue that certain markets and parts of London are undergoing a house price crash. But it’s important to understand the distinction between a house price crash that is relatively localised vs the 2008 house price crash.
“Although, that will be little comfort for people trying to sell property, especially flats, in desirable parts of London.
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