Political certainty may have buoyed the UK housing market in the months following Labour’s return to power but new research suggests that prime central London is bucking the national trend – experiencing a marked decline in property values since the July 2024 general election.
Analysis by London estate agent Benham and Reeves reveals that while the broader market has seen renewed momentum London is one of just two regions to record a fall in average house prices since Labour formed a government.
The capital’s most prestigious postcodes – long regarded as a barometer for international investor sentiment – have borne the brunt of the downturn.
Between July 2024 and February 2025, the average UK house price rose by 1.9%.
NOTABLE IMPROVEMENT
This represents a notable improvement on the 0.7% increase recorded in the eight months leading up to Labour’s election victory, suggesting that stability at Westminster has, on the whole, been good news for homeowners.
Regionally, the East Midlands and North East posted the strongest uplifts in growth rates post-election. However, both London (-0.5%) and Scotland (-0.2%) bucked the national trend, registering modest declines.
At the local authority level, the capital’s most affluent boroughs have seen some of the steepest losses.
WEST END BLUES
Kensington and Chelsea, often viewed as a safe haven for global wealth, recorded a 14.6% drop in average prices since July – an acceleration from the 1.9% fall in the preceding eight months.
In Hammersmith and Fulham, values have slid by 12.4%, compared to a 6.6% dip prior to the election. Westminster has seen an 8% decline since July, reversing the milder 1.1% drop earlier in the year. Camden, meanwhile, has gone from modest growth (+1.7%) to a 7.2% fall.
The only prime borough to buck the trend is the City of London, where average house prices have climbed 1.2% since July, following a 1.7% fall before the election.
GREATER STAABILITY
Marc von Grundherr, Director of Benham and Reeves, says: “2024 was a year of greater stability for the UK property market and, on the whole, this positive market momentum has continued since Labour came into power in July of last year.
“It’s fair to say that they haven’t done much at all to help stimulate the market, however, it’s clear that a settling of the political landscape has helped to boost buyer confidence and this has helped to drive the levels of positive house price growth being seen.”
DIFFERENT BEAST
But he adds: “The prime London market is a very different beast compared to the rest of London, let alone the UK, and it’s clear that the new Labour Government has had a significant impact on prime London property values.
“This is no doubt due to a range of factors, from failing to extend stamp duty relief thresholds, to freezing inheritance tax thresholds and, most significantly, changes to the non-dom tax regime.
“So whilst the prime London market wasn’t performing particularly well in the lead up to last July’s election, it’s clear that the result of said election has drastically accelerated the decline being seen across London’s high-end housing market.
“Of course, this presents a great opportunity for prime London buyers at present, as with further rate cuts on the horizon, we expect the market to settle and values to strengthen over the remainder of the year.”
