It’s certainly not often that I come bearing the news of something in the capital city actually going down in price, but the UK’s property market has hit a bit of a slump – and London is the region that has been most-affected.
This data comes courtesy of the most recent Lloyds House Price Index, a monthly house price series that’s been tracking trends in the world of property value for over 40 years. The October 2026 iteration of the index saw UK house prices experience the steepest annual fall since 2023, with London seeing the biggest drop of all.
The index revealed that London’s house prices have dropped by a rather substantial 3.1% in the past year. The average property cost in the capital city now sits at £524,892, which is – unsurprisingly – still significantly higher than the UK average. Across the country, house prices dropped on average by 1.2% year-on-year, with the average UK house now costing £296,285.
Putting the recently-revealed house price fall into context, Andrew Assam, Mortgages Director at Lloyds, said: “House prices have changed relatively little over the past couple of years, as the market has gradually adjusted to higher interest rates. The recent rise in energy and other household costs have added to the pressure on buyers, so some adjustment in prices is not surprising.
“Looking ahead, conditions are likely to remain subdued in the near term, but we don’t expect this to lead to a sustained period of falling house prices. With wages continuing to rise faster than property prices, the gap between earnings and house prices should gradually narrow, helping affordability to improve over time.”
