Kensington and Chelsea house prices crashed 8% in May

File photo dated 14/10/14 of a sold and for sale signs. A gradual slowdown in the housing market in Scotland is likely as the cost-of-living crisis bites, a report has warned. House prices in Scotland continue to edge upwards but indicators are softening slightly, according to the Royal Institution of Chartered Surveyors (Rics) latest survey. Issue date: Thursday May 12, 2022.

House prices crashed by 8% in Kensington and Chelsea in May, new figures show.

But the large drop does not reverse the longer-term trend, which has seen property prices in the area grow by 7.2% over the last year.

The average Kensington and Chelsea house price in May was £1,316,522, Land Registry figures show – an 8% decrease on April.

Over the month, the picture was different to that across London, where prices increased 0.2%, and Kensington and Chelsea was lower than the 1.2% rise for the UK as a whole.

Over the last year, the average sale price of property in Kensington and Chelsea rose by £89,000 – putting the area 13th among London’s 33 local authorities with price data for annual growth.

The highest annual growth in the region was in Islington, where property prices increased on average by 12.2%, to £742,000. At the other end of the scale, properties in Westminster lost 1.1% of their value, giving an average price of £881,000.

An imbalance between supply and demand for properties has remained the primary reason behind climbing house prices across the UK throughout the pandemic.

But activity is starting to slow, with soaring inflation putting household budgets under pressure.

Sarah Coles, senior personal finance analyst at financial advice company Hargreaves Lansdown, said:“The average house price hit another record high in May, and rose faster than any time since the peak in June last year.

"However, we’re starting to see small changes in the market, which are likely to mean weaker growth in the coming months, especially if interest rates are hiked in August."

First steps on the property ladder

First-time buyers in Kensington and Chelsea spent an average of £1,128,000 on their property – £67,000 more than a year ago, but £86,000 less than in May 2017.

By comparison, former owner-occupiers paid £1,526,000 on average in May – 35.3% more than first-time buyers.

Property types

Owners of flats saw the biggest fall in property prices Kensington and Chelsea in May – they dropped 8.4% in price, to £1,114,245 on average. But over the last year, prices rose by 5.4%.

Among other types of property:

Detached: down 5.6% monthly; up 14.8% annually; £3,896,477 averageSemi-detached: down 6.2% monthly; up 14.4% annually; £3,984,033 averageTerraced: down 6.9% monthly; up 12.4% annually; £2,629,972 average

How do property prices in Kensington and Chelsea compare?

Buyers paid more for properties in Kensington and Chelsea than anywhere else in the UK in May. The average price paid would buy 11.8 homes in Burnley (£112,000), at the other end of the scale.

Across London, property prices are high compared to those across the UK, where the average cost £283,000.

Factfile

Average property price in May

Kensington and Chelsea: £1,316,522London:£526,183UK: £283,496

Annual growth to May

Kensington and Chelsea: +7.2%London: +8.2%UK: +12.8%

Highest and lowest annual growth in London

Islington: +12.2%Westminster: -1.1%