House prices plummet across London and the South East

By the Editorial Team · Tuesday, October 27, 2026

House prices fell in 22 of 31 London and South East postcode areas over the past year, driven largely by rising mortgage rates that pushed average monthly housing costs higher in these expensive regions. This trend highlights increased financial pressure on buyers in wealthier parts of the country and may continue to suppress price growth, prompting calls for stamp duty reform to support affordability.

House prices have declined across London and the South East over the past year, as rising mortgage rates have exerted greater pressure on wealthier areas, according to recent data. Analysis conducted by property portal Zoopla indicates that in the 12 months leading up to September, average house prices fell in 22 of the 31 postcode areas surrounding and within the capital, representing 85% of all homes in the region.

The fall in prices was most pronounced in central London, where agreed sale prices dropped by nearly 6% in 2025. Overall, London saw a 1% reduction in average house prices, with the typical property value decreasing by £5,400 to £523,100. In the South East, prices declined 0.6% to an average of £382,600. In contrast, regions such as the North West experienced growth, with prices rising by 3.2% to an average of £211,400.

The increase in mortgage rates has played a significant role in these trends. Borrowers in London have experienced an average monthly increase of £215 in housing costs since September of the previous year, compared to just £90 in the North East, underscoring the uneven financial impact across the country. Richard Donnell, an analyst at Zoopla, explained that buyers in the South are more vulnerable to rising borrowing costs due to the higher property prices and associated expenses, such as stamp duty, compared to the North.

More broadly across Britain, 37 of 119 postcode areas recorded price falls, accounting for 35% of all homes—a notable increase from 12% a year earlier. Decreases were also observed in the South West, East of England, the West Midlands, and Wales, while the North of England and Scotland saw no notable declines.

Tom Bill of estate agency Knight Frank cautioned that buyers in already less affordable areas may face continued financial strain, as house price growth has stalled this year. He suggested that downward pressure on prices could persist into the final months of the year, potentially exacerbated by recent government budget measures.

While welcoming the introduction of the government-backed Your First Home scheme aimed at assisting first-time buyers, Richard Donnell urged Chancellor John Healey to consider reforming stamp duty to alleviate barriers to homeownership, particularly in high-cost regions.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.