House prices have dropped in 20 London boroughs in a year, official figures reveal.

The biggest slump was in Westminster, down 20.7% from £1,106,000 for the average house price in July 2025 to £877,000 this summer.

The sharp decline in London’s centre though was less than the fall of nearly 25% in the figures last month for the year to June.

Three other boroughs saw falls of more than 10%.

The average house price, which includes flats, in Tower Hamlets was £448,000 in July 2026, down 14.4% from the £523,000 a year ago.

The fall in Kensington and Chelsea was 14.1%, from £1,435,000 to £1,233,000, according to the figures from the Office for National Statistics.

It was 10.1% in Camden from £907,000 to £815,000.

Other boroughs seeing significant falls include Hammersmith and Fulham (9%), Lambeth (6.3%), Wandsworth (5.5%), Newham (5%) and Barnet (4.9%)

Eleven boroughs saw an increase in the average house price, with the biggest in Barking and Dagenham at 5.3%, from £357,000 to £376,000.

Despite house prices falling, rents rose in nearly every borough.

The largest increases in the year to August were in Islington (6.2%), Greenwich (6.1%) Southwark and Merton, both 5.4%, and Enfield (5.1%).

Across London, the average house price dropped 3.3% in the year to July, and the average rent rose 3.6% in the 12 months to August, with some landlords blaming the Righters’ Rights Act for pushing up bills.

The fall in house prices comes amid the heightened economic uncertainty due to Donald Trump’s Iran war which has ratcheted up inflation and fuel prices.

The Bank of England’s Monetary Policy Committee on Thursday kept interest rates at 3.75%.

But fixed mortgage rates have been rising in recent weeks.

Homeowners in London have been warned they could face annual mortgage bill rises of £2,600 if there are four interest rate rises later this year and in 2027.

David Hollingworth, associate director at L&C Mortgages, said: “Markets are becoming increasingly sensitive to signs that inflation could prove more stubborn than expected, particularly given ongoing geopolitical uncertainty and higher fuel and energy prices.

“Consequently, homeowners have had to come to terms with higher mortgage rates and a less favourable mortgage market than just a few months ago.”

Amy Reynolds, head of sales at London-based estate agency Antony Roberts, said that in the rental sector: “Supply remains tight as landlords continue to leave the sector, so tenants face stiff competition for good homes, and we don’t see that easing this autumn.”

More than a million Londoners are also facing large increases in council tax bills, partly due to the Government cutting back on central funding for a number of boroughs including Westminster and Wandsworth.