This is the firm’s quarterly note on the London market, written for a buyer from the Gulf who wants the official figures, not an agent’s, and the firm’s reading of them. It is refreshed each quarter when the Office for National Statistics and HM Land Registry publish; the figures below are the July 2026 prices and August 2026 rents published in September, read on 14 October 2026.
Market notes
London property prices in 2026: where the market is and what it means for a buyer from the Gulf
London average house price in July 2026 and rents
The average London home cost £569,000 in July 2026, down 3.3 per cent on the year, and London is the only English region falling. Rents averaged £2,332 a month in August 2026, up 3.5 per cent, so gross yields on ordinary stock are 4.5 to 5 per cent. For a Gulf buyer, sterling at about 1.33 against 1.70 at the 2014 peak makes prime London 35 per cent or more cheaper than its peak. The catch: the inner boroughs are still falling and ordinary stock takes months to sell.
The average London home cost £569,000 in July 2026, 3.3 per cent less than a year earlier, on the provisional UK House Price Index; it was the eleventh consecutive month in which London’s annual change was negative, and the weakest annual figure since January 2024. England as a whole rose 1.1 per cent and the UK 1.4 per cent in the same year, to an average of £273,000; London is the only English region falling.
London rents against house prices in 2026
Private rents in London averaged £2,332 a month in August 2026, up 3.5 per cent on the year, against 3.8 per cent across the UK. Prices falling while rents rise is the pattern of the last three years, and it is why yields have risen from their 2021 low.
London house prices by borough in July 2026
The provisional borough averages for July 2026:
Average prices by borough, July 2026
| Borough, July 2026 | Average price | Annual change |
|---|---|---|
| Kensington and Chelsea | £1,072,600 (February index) | about flat |
| Westminster | £877,000 | sharply lower on the provisional figure, from a thin sample |
| Camden | £815,000 | down 10 per cent |
| Richmond upon Thames | £803,000 | down 0.8 per cent |
| Hammersmith and Fulham | £738,000 | down 9 per cent |
| Wandsworth | £686,000 | down 5.5 per cent |
| Southwark | £572,000 | flat |
| Tower Hamlets | £448,000 | down 14 per cent |
| Newham | £390,000 | down 5 per cent |
Source: HM Land Registry UK House Price Index, July 2026, provisional; Kensington and Chelsea from the February index.
The borough figures are provisional and the central boroughs’ samples are small, so single-year changes of 10 per cent or more should be read as direction rather than magnitude; the direction is down in the inner boroughs, flat in the outer. The sharpest falls are in the eastern boroughs where the 2010s towers were built and where the new-build premium is unwinding, which our guide on off-plan or completed property anticipated.
Prime central London prices compared with the 2014 peak
The official indices do not separate prime central London, so the firm uses Land Registry sales in the prime postcodes and the agents’ prime indices, which agree on the shape: prices in Mayfair, Knightsbridge, Belgravia, Kensington and St John’s Wood peaked in sterling in 2014 to 2016, fell 15 to 20 per cent by 2019, recovered a little in 2021 and 2022, and have drifted since; in autumn 2026 they are roughly at 2014 levels in sterling, which, after a decade of inflation, is a third lower in real terms.
Prime London turnover and why it is a buyer's market
The district guides in this series give the per-square-foot ranges. Turnover is low, the best houses and flats are still bid for, and the ordinary stock takes months to sell. It is a buyer’s market for anyone who can pay cash and wait.
London property prices in dirhams, riyals and dinars for Gulf buyers
Because the dirham, the riyal and the dinar are pegged to the dollar, a Gulf buyer’s price is the dollar price. Sterling at about 1.33 against the dollar on 14 October 2026 compares with about 1.70 at the 2014 peak; a Mayfair flat that cost $1,700,000 then costs, at the same sterling price, about $1,330,000 now. In dirhams, prime London is around 20 per cent cheaper than at its peak before any fall in sterling prices is counted, and 35 per cent or more cheaper once it is. Our London or Dubai comparison and our guide on currency transfers from the Gulf both rest on this arithmetic.
Why London property prices have fallen: interest rates and tax
Three reasons, in the firm’s reading. Interest rates: the Bank of England’s base rate rose from 0.1 per cent in 2021 to 5.25 per cent in 2023 and has come down slowly since, and a mortgaged buyer in London can afford a third less than in 2021. Tax: the stamp duty surcharges, the end of the non-domicile regime in April 2025 and the extension of inheritance tax to long-term residents’ worldwide assets have reduced the international demand that set prime prices.
Prime London supply and why the fall is not a crisis
And supply at the top: the 2010s built thousands of prime new flats that are still being absorbed. None of these is permanent, and all of them are known, which is what makes the present level a price rather than a crisis.
London rent rises in 2026 and the Renters' Rights Act
Rents rose in every borough in the year to August 2026, by 3 to 5 per cent, after rises of 8 to 12 per cent in 2023 and 2024; the Renters’ Rights Act, in force since May, limits increases to once a year by notice and has slowed the pace without reversing it.
London rental yields in 2026 on ordinary and prime stock
Gross yields on ordinary London stock are now 4.5 to 5 per cent on the official averages, as our guide on London rental yields by area sets out; on prime flats, 3 to 3.5. For an investor, London income is better than at any time since 2012; for a tenant, the city is more expensive than ever, which is the other side of the same figure.
What London prices mean for a Gulf family buying a home
For a Gulf family buying a home it will use: this is the best buying moment in a decade, in dollar terms the best since before 2014, and the firm’s advice is to buy the right building in the right district rather than to wait for a bottom nobody will announce.
What London prices mean for investors and long-term owners
For an investor: income is as good as it has been, the eastern boroughs are cheaper but still falling, and a completed flat in a well-run block in a district with a deep tenant pool is the purchase, not a new tower. For anyone: the ten-year view is what matters, and over ten years London has not failed a patient owner of a good building in a good street.
Sources: Private rent and house prices, UK: September 2026 (ONS) · UK House Price Index, England: July 2026 (GOV.UK) · Bank of England: Bank Rate history. Checked against the Office for National Statistics’ September 2026 private rent and house prices bulletin and HM Land Registry’s UK House Price Index for July 2026. Borough figures are provisional. Prime central London figures are the firm’s reading of Land Registry sales and agents’ indices. Next refresh: January 2027. General information, not investment advice. Figures verified 14 October 2026.
Frequently Asked
Questions about London property prices in 2026
The inner boroughs may, on the provisional figures; prime central London has been flat for a decade and is more likely to drift than to fall. The firm does not forecast, and advises against buying on a forecast either way.
In dollar terms, yes, by a wide margin against any year since 2014. The decision should still be about the building and the use, not the moment.
Kensington and Chelsea and Richmond on the official figures; the best streets of Mayfair, Belgravia and St John’s Wood on the sales the firm sees; and nothing in the eastern new-build belt yet.
The average London home cost £569,000 in July 2026, 3.3 per cent less than a year earlier on the provisional UK House Price Index, the eleventh consecutive month of annual falls and the weakest figure since January 2024. England as a whole rose 1.1 per cent and the UK 1.4 per cent to an average of £273,000; London is the only English region falling.
Because the dirham, the riyal and the dinar are pegged to the dollar, the Gulf buyer’s price is the dollar price. Sterling at about 1.33 on 14 October 2026 compares with about 1.70 at the 2014 peak, so a Mayfair flat that cost $1,700,000 then costs about $1,330,000 now at the same sterling price. Prime London is around 20 per cent cheaper in dirhams before any fall in sterling prices is counted, and 35 per cent or more cheaper once it is.
Three reasons, in the firm’s reading. Interest rates: the base rate rose from 0.1 per cent in 2021 to 5.25 per cent in 2023, and a mortgaged London buyer can afford a third less than in 2021. Tax: the stamp duty surcharges, the end of the non-domicile regime in April 2025 and the extension of inheritance tax to long-term residents’ worldwide assets have cut international demand. And supply: the 2010s built thousands of prime new flats that are still being absorbed.
Private rents averaged £2,332 a month in August 2026, up 3.5 per cent on the year, and rose in every borough by 3 to 5 per cent after rises of 8 to 12 per cent in 2023 and 2024. Gross yields on ordinary London stock are now 4.5 to 5 per cent on the official averages, and 3 to 3.5 per cent on prime flats. For an investor, London income is better than at any time since 2012.
On the provisional July 2026 figures, Tower Hamlets is down 14 per cent to £448,000, Camden down 10 per cent to £815,000 and Hammersmith and Fulham down 9 per cent to £738,000. The central samples are small, so single-year changes of 10 per cent or more are direction rather than magnitude. The sharpest falls are in the eastern boroughs where the 2010s towers were built and the new-build premium is unwinding.
Prices in Mayfair, Knightsbridge, Belgravia, Kensington and St John’s Wood peaked in sterling in 2014 to 2016, fell 15 to 20 per cent by 2019, recovered a little in 2021 and 2022, and have drifted since. In autumn 2026 they are roughly at 2014 levels in sterling, which after a decade of inflation is a third lower in real terms. Turnover is low and ordinary stock takes months to sell; it is a buyer’s market for anyone who can pay cash and wait.
Each quarter, when the Office for National Statistics and HM Land Registry publish. The figures here are the July 2026 prices and August 2026 rents published in September, read on 14 October 2026. The next refresh is January 2027.
