Archive · 16 Jan 2026
London's Property Market Faces Significant Slump
London's property market is having a tough time.
Many people who own flats are selling them for much less money than they paid, sometimes losing up to 34% of their value.
This is happening because houses in London are very expensive, there are a lot of them for sale, and people have to pay extra taxes when they buy a new home.
Also, new homes that were just built aren't selling well because they cost more than older homes.
Some people think the market might start to get better soon, but others aren't so sure.
It's a big problem because people who rent are upset they can't buy homes, and people who own homes are upset because their homes aren't worth as much as they thought they would be.
London has the highest proportion of homes sold at a loss in England and Wales, with flats losing up to 34% of their value.
Factors contributing to the slump include affordability pressures, higher supply, increased stamp duty costs, and budget speculation.
The market is divided, with more affordable areas seeing strong demand while expensive boroughs experience price contractions.
New-build properties are increasingly unloved by buyers due to higher prices and regulatory challenges.
Forecasters are divided on future trends, with predictions of a modest 1% increase in London house prices next year, compared to 2-3% nationally.
- Who
- Homeowners, especially flat owners, and potential buyers in London
- What
- A slump in London's property market with significant losses on property values
- When
- The issues have been ongoing, with specific impacts noted in the past year
- Where
- London, particularly in more expensive boroughs and new-build properties
- Why
- Due to affordability pressures, higher supply, increased stamp duty costs, and speculation about the autumn budget
- Region with Highest Loss
- London
- Loss Percentage for Flats
- Up to 34%
- Factors Affecting Market
- Affordability pressures, higher supply, stamp duty costs, budget speculation
- New-Build Property Demand
- Decreasing
- Predicted London House Price Increase
- 1% next year
- Average UK House Price Increase Prediction
- 2-3% next year
- Political Impact
- Potential serious issue due to price crash