The latest figures from the Office for National Statistics (ONS) indicate a continuing decline in London property prices, contrasted by growth in the north of England. This divergence highlights a growing regional disparity within the UK housing market.

London Property Market Decline

London property prices have fallen by 3.3 percent in the year to February, representing an average decrease of £18,768 per property. Inner London is experiencing a more significant downturn, with a 5.6 percent drop in average home values.

Inner London Impact

This inner London decline affects the City of London and thirteen boroughs: Camden, Hackney, Hammersmith and Fulham, Haringey, Islington, Kensington and Chelsea, Lambeth, Lewisham, Newham, Southwark, Tower Hamlets, Wandsworth, and Westminster. Average home values in these areas have decreased by £36,699, from £659,520 to £622,821.

Northern England Sees Price Increases

In contrast to the south, the north of England is witnessing property price increases. Yorkshire and the Humber have seen a 3.9 percent rise, bringing the average home price to £209,000. The north west and north east have also recorded increases of 3.4 percent and 3.6 percent respectively.

Regional Trends and National Average

The south east and south west of England are also experiencing falling prices, with declines of 0.9 percent and 0.6 percent respectively. Nationally, UK property prices have increased by 1.2 percent over the past year, with the average home price now at £268,000.

Flats vs. Houses and Market Factors

The decline in London prices is largely attributed to struggles within the flat market, particularly new-build flats. The average flat price in England has decreased by 3.8 percent year-on-year, falling from £224,000 to £216,000. This contrasts with semi-detached houses, which have seen a 2.6 percent increase in value.

London Flat Market

In London, flats have experienced a more substantial drop of 6.1 percent, with the average selling price decreasing from £448,000 to £421,000. Factors contributing to this trend include the end of the Help to Buy scheme and growing concerns surrounding leasehold ownership.

Increased supply and rising ground rent and service charges for leasehold properties are also contributing to price reductions. These current market conditions present challenges for both sellers and buyers, influenced by regional variations, property types, and economic factors.