House prices slump 23% in central London, shock new figures reveal

House prices have plummeted by more than a fifth in central London in a year, according to new figures.This was by far the biggest fall in the capital, taking the average house price in Westminster to £836,000.“It’s a very substantial correction after a very long run of higher house prices,” said Russ Mould, investment director at AJ Bell.“There is combination of factors ranging from the economic to the political.”They included higher interest rates, leading to bigger mortgage payment bills, tax changes, and some people who may have moved abroad as they had possibly decided “their capital is not as welcome in the UK as it once was,” he added. Property prices have been falling in LondonAFP/GettyThe capital’s property market could be further hit if Prime Minister Andy Burnham presses ahead with a new homes levy to replace council tax and stamp duty, which he has previously backed. The second biggest drop in house prices in the year to May was in Tower Hamlets, of 14.5%, followed by Hammersmith and Fulham at 10.9%, and Kensington and Chelsea at 10.7%.The overall decline in house prices across London accelerated to 3.7% in the year to May, up from 2.3% in the 12 months to April.Read MoreRichard Donnell, executive director of research at Zoopla said: “Political change, the World Cup, a scorching summer and elevated mortgage rates have hit housing market activity this summer.“Zoopla’s very latest data shows 20% fewer buyer inquiries than a year ago and 7% fewer sales agreed.”BoroughAverage house price May 2026Percentage change in the year to May 2026Barking and Dagenham£361,000Little changeBarnet£591,000-4.3Bexley£409,000+2.2Brent£549,000-3.3Bromley£525,000Little changeCamden£806,000-6.2Croydon£397,000Little changeEaling£569,000-2.5Enfield£469,000Little changeGreenwich£463,000Little changeHackney£608,000Little changeHammersmith & Fulham£729,000-10.9Haringey£634,000+2.4Harrow£530,000Little changeHavering£453,000+2.8Hillingdon£468,000Little changeHounslow£501,000-2.4Islington£670,000-6.4Kensington & Chelsea£1,256,000-10.7Kingston£582,000Little changeLambeth£545,000-2.9Lewisham£497,000+2.3Merton£597,000-1.3Newham£405,000-1.4Redbridge£496,000+2.4Richmond£789,000-2.5Southwark£579,000Little changeSutton£445,000Little changeTower Hamlets£444,000-14.5Waltham Forest£524,000+3.1Wandsworth£660,000-6.1Westminster£836,000-22.8Source: ONSHouse prices have now fallen in London for nine months in a row, according to the ONS.The figure for the city are in stark contrast to house prices rising on average across the UK.The size of the Westminster fall may be partly down to fewer transactions which can influence the scale of drops.They were down 18.8% in the year to April in Westminster, 12.3% in the 12 months to March, while the figure was 11.6% for February and 9.6% for January.The average UK house price increased by 2.7% in the 12 months to May, slowing from a 3.9% annual increase in April, the ONS said.Across the UK, the typical house price in May was £271,000.