After a decade of fluctuating demand and rising costs, the real price of a typical London apartment has fallen by 22% when adjusted for inflation. This marks a significant shift in the city's once-tight housing market.
- Real apartment prices in London fell 22% from 2015 to 2025 when adjusted for inflation
- Peak real price reached £780,000 in 2015; declined to £610,000 by 2025
- Average listing time increased to 112 days in 2025, up from 72 days in 2015
- Transaction volumes dropped 35% over the decade, with 58,000 sales in 2024
- Central boroughs like Kensington and Chelsea saw real price declines of 26%
- Outer boroughs experienced smaller drops, ranging from 15% to 17%
The real cost of owning a residential apartment in London has declined by 22% over the past ten years, according to data compiled from public records and national housing statistics. This adjustment accounts for inflation, revealing that despite nominal price increases in certain years, average purchasing power has eroded across the market. The peak in real prices occurred in 2015, when the average apartment cost approximately £780,000 in constant pounds, a level not matched since. By 2025, the average real value had settled at around £610,000, reflecting a prolonged period of stagnation and decline in affordability. The shift is driven by several interrelated factors, including higher interest rates, elevated living costs, and a weakening demand from international buyers. Since 2018, the UK’s base interest rate has risen from 0.5% to 5.25%, increasing mortgage repayments and pricing out many potential buyers. Additionally, the post-Brexit migration landscape has reduced foreign investment, particularly from non-EU nationals who historically played a major role in London’s residential market. Key indicators show that transaction volumes have dropped by 35% since 2015, with the number of new leases and sales falling to levels not seen since the early 2000s. In 2024 alone, only 58,000 residential transactions occurred across Greater London—down from a peak of 82,000 in 2015. This reduced activity has led to longer listing times, with the average apartment now on the market for 112 days—up from 72 days a decade ago. The impact is felt most acutely in central boroughs such as Kensington and Chelsea, where real prices have fallen by 26%, and Westminster, down 24%. However, outer boroughs like Havering and Bexley have seen smaller declines, with real prices dropping by 15% and 17%, respectively. These regional disparities suggest a broader reevaluation of location value as remote work and cost-of-living pressures reshape urban living preferences.