Key Points
- London’s average asking price in December 2025 was £661,000, unchanged from December 2024, indicating zero headline growth in the capital’s housing market this year.
- Rightmove data show national asking prices fell by 0.6 per cent over 2025, with December’s 1.8 per cent monthly drop reflecting a seasonal lull and wider caution.
- As reported by Homes & Property at the Evening Standard, drawing on Rightmove data, east London led the capital’s growth, with Havering’s average asking price rising 4.7 per cent in 2025 to £498,000.
- According to the same London-wide analysis, Tower Hamlets saw a 4.1 per cent annual increase, Hackney 2.9 per cent, and Waltham Forest 2 per cent, placing all four leading gainers in east London.
- More London boroughs experienced price falls than rises in 2025, underlining a broadly subdued market despite pockets of growth in the east of the city.
- Westminster recorded the sharpest decline, with average asking prices down 7.9 per cent to £1.35 million, while Camden fell 3.5 per cent to £1.02 million.
- Newham, despite being in east London, also saw prices fall, with a 3.4 per cent annual drop to £459,000, highlighting localised differences even within rising regions.
- Rightmove’s December 2025 housing market update confirms London finished the year flat on an annual basis, with prices down 1.2 per cent month on month at year-end.
- Across the UK, Rightmove’s latest index shows a 3 per cent annual rise in sales agreed, suggesting resilient underlying demand despite price softness.
- Analysts at Rightmove and quoted agents link the second-half slowdown particularly to speculation over property tax rises ahead of the November Autumn Budget.
- According to Claire Reynolds, UK Head of Sales at Strutt & Parker, weeks of Budget speculation cooled discretionary moves but sentiment improved rapidly once the measures were finally announced, producing what she described as a “Budget bounce”.
- Rightmove is forecasting a 2 per cent UK house price rise in 2026, supported by improved affordability, greater buyer choice and expectations of more stable economic conditions.
- The average two-year fixed mortgage rate has eased to around 4.33 per cent, down from about 5.08 per cent a year earlier, improving buyers’ capacity to borrow.
- Regionally, price growth in 2025 was strongest in the North West of England at 2.6 per cent, while the South West saw a 2.7 per cent decline, underscoring stark regional contrasts beyond London.
- Market commentators expect sellers in 2026 to continue pricing keenly and presenting homes carefully in order to stand out in a market where buyer choice remains high.
How did London’s average house price change in 2025?
London’s average asking price ended 2025 at £661,000, exactly the same level recorded in December 2024, meaning the capital saw no overall growth in advertised values across the year. This flat performance contrasts with some previous years of strong gains and indicates a year in which affordability pressures, higher borrowing costs and tax uncertainty largely offset continued demand for homes in the city.
Nationally, Rightmove’s latest House Price Index shows average new seller asking prices fell by 0.6 per cent over the course of the year, after a 1.8 per cent drop between November and December alone. Rightmove’s own December housing market update further notes that London’s prices fell 1.2 per cent month on month at year-end but finished 2025 flat compared with a year earlier, reflecting both seasonal effects and structural challenges in the capital.
Which London boroughs recorded the biggest house price rises?
As reported by the Homes & Property team at the Evening Standard, using Rightmove’s borough-level data, the strongest house price growth in London during 2025 was concentrated in east London. According to that analysis, Havering topped the annual growth league table, with average asking prices rising 4.7 per cent over the year to reach £498,000.
The same article notes that the next three boroughs in the growth rankings were also in the east: Tower Hamlets saw a 4.1 per cent rise, Hackney recorded a 2.9 per cent increase and Waltham Forest registered a 2 per cent uplift in average asking prices. This cluster of growth in the east reflects longer-running patterns of relative affordability, transport improvements and regeneration-led demand beyond London’s most expensive inner districts.
Where did London house prices fall the most in 2025?
While a handful of eastern boroughs posted gains, the Evening Standard’s breakdown makes clear that more London boroughs saw prices fall than rise during 2025. At the top end of the market, the Inner London borough of Westminster experienced the steepest annual decline, with average asking prices down 7.9 per cent to about £1.35 million.
In neighbouring high-value areas, Camden recorded a 3.5 per cent drop, leaving average asking prices around £1.02 million, according to the same reporting of Rightmove figures. In a sign that price weakness was not confined to the very centre, the east London borough of Newham also saw a 3.4 per cent fall to approximately £459,000, demonstrating that local market conditions, stock mix and buyer sentiment played a key role in determining 2025 outcomes.
What national trends and economic factors shaped the 2025 housing market?
Rightmove’s national data show that average new seller asking prices fell 0.6 per cent across the UK over 2025, following a year-end monthly decline of 1.8 per cent that the portal describes as both seasonal and reflective of cautious pricing. The December 2025 housing market update further highlights that while London ended the year flat, overall UK sales agreed were 3 per cent higher than in 2024, indicating that demand remained resilient where properties were competitively priced.
According to analysts cited in the Evening Standard’s coverage and in Rightmove’s own commentary, a significant factor behind the softer second half of the year was the “uncertainty and gloom” generated by rumours of property tax rises ahead of the November Autumn Budget. This speculation appears to have particularly affected higher-value southern and London markets, where proposed measures such as a potential mansion tax or threshold changes would have had a larger impact on buyers and sellers.
How did the Autumn Budget and tax speculation influence buyer and seller behaviour?
As reported by the Homes & Property section of the Evening Standard, Rightmove analysts argued that the weeks of speculation over potential property tax changes before the Autumn Budget effectively cooled the market, especially for those contemplating discretionary moves rather than essential relocations. Many prospective sellers appear to have delayed listing until after the fiscal picture became clearer, contributing to subdued new instructions in the latter part of the year.
In a detailed assessment quoted by the same article, Claire Reynolds, UK Head of Sales at Strutt & Parker, said that
“the weeks of speculation leading up to the Autumn Budget certainly cooled the property market, especially for those making discretionary moves,”
but added that
“the mood shifted almost instantly once the day finally arrived, with some evidence of a ‘Budget bounce’ in the past couple of weeks”.
Her remarks suggest that while uncertainty had a dampening effect on activity, clarity on tax policy quickly unlocked some pent-up demand from buyers and sellers who had been waiting on the sidelines.
What role did mortgage rates and affordability play in 2025, and what is forecast for 2026?
Rightmove and the Evening Standard’s Homes & Property coverage both point to improving affordability as one of the key themes emerging towards the end of 2025. The average two-year fixed mortgage rate is now reported at about 4.33 per cent, down from around 5.08 per cent a year earlier, easing some of the pressure on buyers’ monthly repayments and borrowing capacity.
In its latest commentary, Rightmove forecasts a 2 per cent rise in UK house prices during 2026, citing the combination of slightly lower rates, rising average wages and a wide range of homes on the market as reasons to expect more movement. However, the portal also emphasises that with buyer choice remaining high, sellers will need to bring properties to market at tempting prices and ensure that they are presented as well as possible in order to stand out and secure a sale.
How did London’s performance compare with other UK regions in 2025?
While London finished 2025 with flat annual price growth, regional data reported in the Evening Standard article and other market reviews show a more varied picture across the country. Across the nation, price growth was strongest in the North West of England, where values rose by around 2.6 per cent, whereas the South West registered a 2.7 per cent annual decline.
Rightmove and regional commentators highlight that markets outside London and the South have generally been more resilient, with some areas in the Midlands and North posting stronger demand and modest price gains even as the capital and other southern regions adjusted. This divergence reflects differences in local affordability, supply levels and exposure to higher-value segments that are more sensitive to tax and mortgage rate changes.
What do analysts and agents expect from London’s housing market in 2026?
Analysts quoted by the Evening Standard and Rightmove anticipate that 2026 could bring a better year for price growth, particularly if economic conditions stabilise and the mortgage market continues to ease. In comments carried by Homes & Property, Colleen Babcock of Rightmove said that with market conditions supporting higher levels of activity and a hopefully more certain economic environment, a stronger rebound in activity is expected to kick-start the new year.
At the same time, both portal data and agent commentary stress that London’s high-value market may remain more sensitive to any further tax changes or shifts in sentiment than other regions. The consensus is that pricing discipline and realistic expectations from sellers will be crucial, particularly in central boroughs where 2025 brought noticeable price declines, while more affordable outer and eastern boroughs could continue to outperform as buyers seek relative value.
