Property values in central London’s most expensive boroughs have fallen by 12 percent over the past three years as higher taxation and tougher regulation weigh on the capital’s housing market, according to new analysis from Savills.
Westminster and Kensington & Chelsea – the two most valuable boroughs in London – have seen values decline sharply since 2022, contrasting with strong growth in the North of England and devolved nations.
North outpaces South as housing wealth shifts
The total value of UK housing stock now stands at £9.18 trillion, having grown by £136 billion in 2025. However, this represents a slowdown from the £268 billion added in 2024.
Despite accounting for just 27 percent of total UK housing value, the North of England and devolved nations contributed 60 percent of growth since 2022. The North West led all regions with £63 billion in added value over three years – 2.4 times the £26 billion growth recorded in London.
Lucian Cook, head of residential research at Savills, said: “The capital appreciation of £336 billion since the end of 2022 is the lowest we have seen for a three-year period since 2013. That partly reflects the initial pressure put on prices as mortgage costs rose over the course of 2023.”
Cook added that the housing market had been slow to respond to recent cuts in the Bank of England base rate, with the absence of price growth across London and the South East keeping a lid on aggregate figures.
Regional performance reflects market cycle
Dan Hill, senior research analyst at Savills, said regional performance continues to reflect the second half of the housing market cycle. More affordable markets in the North, Scotland and Wales retain greater capacity for growth, while London and the South East remain constrained.
“However, housing wealth remains heavily concentrated in London and the South East,” Hill said. “These regions command a disproportionately large share of total UK housing value relative to their share of the housing stock.”
Notably, the combined value of Westminster and Kensington & Chelsea at £209 billion still surpasses the entire housing stock of the North East at £196 billion – despite the North East recording 11 percent growth over the same period.
What this means for landlords
For buy-to-let investors, the data highlights continuing regional divergence. Those holding London assets face capital depreciation at a time when tax changes are already squeezing margins. Meanwhile, Savills’ analysis shows northern markets continue to offer both yield advantages and capital growth potential.
Editor’s view
The 12 percent fall in prime London values confirms what many landlords already suspect: the capital’s buy-to-let market has lost its shine. Higher stamp duty, tighter regulation and stretched affordability have combined to make the North a more attractive proposition for investors seeking both income and growth.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 17 February 2026
Sources: Savills Research
Related reading: House prices flat in February as market finds its level
