Are London House Prices Falling? The Latest Data, Forecasts & Predictions
The London property market has always been a talking point and in October 2025 the question on everyone’s mind remains: are London house prices falling?
With inflation easing, interest rates cut several times this year, and renewed demand in commuter zones, London’s housing market is showing early signs of stabilisation. Yet, performance varies widely across the capital, some boroughs are recovering, while others continue to cool.
In this updated London house price forecast for 2025, we look at the latest data, expert predictions, and what this all means for buyers, sellers, and investors.
What is the average house price in London right now?
As of October 2025, the average house price in London is approximately £684,000, according to recent figures from Rightmove and the Land Registry.
That’s a 2% rise since early 2025, but still around 5% below the market peak of 2022, when the average London home cost over £720,000.
Outer boroughs like Bromley, Bexley, and Croydon are seeing mild growth, driven by improved affordability and the easing of mortgage rates. Meanwhile, Central London (including Kensington, Mayfair, and Chelsea) continues to see muted demand, with prices down around 3 to 4% year-on-year.
Why are house prices falling in some parts of London?
Several key factors explain why house prices are falling in London, especially in higher-value areas:
- Lingering affordability challenges: Even with rate cuts, mortgage costs remain higher than during the 2020–2022 boom. Many buyers are still constrained by affordability tests.
- International buyer caution: Global uncertainty and currency fluctuations have reduced overseas demand in Prime Central London.
- Changing lifestyle trends: While some workers are returning to the office, hybrid working remains common, which keeps demand steady in outer zones rather than city-centre postcodes.
- Increased supply : A growing number of sellers are listing properties to take advantage of stabilising prices, slightly outpacing buyer demand in some areas.
Still, London’s property market remains far more resilient than early forecasts suggested.
London house price forecast: What experts predict for late 2025 and 2026
Economists remain cautiously optimistic about the London house price forecast for the rest of 2025 and into 2026.
- Zoopla forecasts London prices will grow by 1 -2% in Q4 2025, driven by pent-up demand and improved buyer sentiment.
- Savills’ London house price predictions suggest a 3-5% annual rise in 2026, assuming the Bank of England continues gradual rate reductions and inflation remains below 3%.
- Nationwide anticipates regional variations, with outer London outperforming the core PCL market for the first time in a decade.
In short, the market appears to be bottoming out rather than falling sharply.
How falling interest rates are shaping the recovery
Since mid-2024, the Bank of England has cut interest rates from 5.25% to 4.25%, bringing some relief to buyers and homeowners.
Lower borrowing costs are gradually boosting affordability, particularly for first-time buyers and upgraders who paused their plans during the rate-hike years.
Mortgage approvals in London have increased by nearly 12% since April 2025, signalling a slow but steady return of confidence in the housing market.
What does this mean for sellers in Q4 of 2025?
If you’re considering selling your London property this autumn, timing and strategy matter more than ever.
Three key tips for London home sellers in 2025:
- Be realistic on price: Buyers remain value-focused. Properties priced competitively from the outset sell faster and attract more genuine offers.
- Enhance presentation: Staging, decluttering, and minor cosmetic updates can dramatically improve first impressions.
- Act during the recovery phase: With mortgage rates easing and buyer interest returning, listing your home before the next market upswing could help secure a stronger sale price.
Long-term London house price predictions
Looking ahead, most analysts expect steady growth rather than volatility.
- Average London prices are forecast to rise between 2–4% in 2026,
- Stabilise through 2027 as the economy adjusts,
- And potentially accelerate again by 2028 if interest rates remain low and international investment rebounds.
However, as always, London behaves differently from the rest of the UK as its diverse boroughs, overseas demand, and luxury segment ensure that blanket predictions rarely apply evenly.
Are London house prices falling or stabilising?
In October 2025, the answer is – not everywhere, and not for long.
While central postcodes continue to see modest declines, outer and commuter-friendly areas are showing clear signs of recovery. With interest rates falling, wage growth steady, and confidence returning, the London housing market appears to be stabilising after two turbulent years.
Thinking of selling your home in London?
If you’re planning to sell your property in 2025, now could be the right time to act while market sentiment is improving.
Sell House Fast assists homeowners in achieving a fast house sale or fast flat sale at competitive prices, even in uncertain markets. Whether your property is in Zone 1 or the outer boroughs, we can provide you with a free, no-obligation cash quote and guide you through the entire process.
