London house prices still falling while rents pick up again, ONS figures show

London’s property market is pulling in two directions: prices remain below last year’s high, while rents are rising faster again, according to official figures published on 16 September.

House prices

The average London house price is now about £19,000 below its July 2025 peak of £569,000, according to the Office for National Statistics (ONS). That puts the current average at roughly £550,000. Across the UK, the average price was £273,000 in July, up 1.4% on a year earlier, and the annual rate has now slowed for three months in a row.

Reports of the release say London prices fell 3.3% in the year to July, the eleventh consecutive annual fall.

Rents

The ONS says the average UK private rent was £1,400 a month in August, up 3.8% in 12 months. That is the fastest annual rise since December 2025, and the ONS attributes the pickup mainly to London, where annual rent inflation reached its highest level since October 2025.

Kensington and Chelsea had the highest average monthly rent in the UK, at £3,690. Reports of the release put the London average at £2,332 a month, with rents up 3.5% on the year.

Other trackers use different measures. Zoopla, which looks at new lets, puts London rental growth at 2.9%, with rising demand and fewer homes available to rent. It expects UK rental growth to reach 4% to 5% by the end of 2026.

What it means

Renters are still facing rising costs, and Zoopla says higher mortgage rates are keeping some would-be first-time buyers in the rental market for longer.

Buyers may find more room to negotiate in a softer market, but affordability still depends heavily on mortgage rates and deposits.

This article is for general information, not financial advice.

Sources:

• ONS, Private rent and house prices, UK: September 2026: https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/privaterentandhousepricesuk/september2026
• Zoopla Rental Market Report, September 2026: https://www.zoopla.co.uk/discover/property-news/rental-market-report/