Kensington and Chelsea house prices dropped slightly in August

House prices dropped slightly, by 0.9%, in Kensington and Chelsea in August, new figures show.

The drop contributes to the longer-term trend, which has seen property prices in the area suffer a 4.5% annual decline.

The average Kensington and Chelsea house price in August was £1,336,232, Land Registry figures show – a 0.9% decrease on July.

Over the month, the picture was different to that across London, where prices increased 0.9%, and Kensington and Chelsea was lower than the 0.9% rise for the UK as a whole.

Over the last year, the average sale price of property in Kensington and Chelsea fell by £63,000 – putting the area 31st among London’s 33 local authorities with price data for annual growth.

The highest annual growth in the region was in Harrow, where property prices increased on average by 15.9%, to £556,000. At the other end of the scale, properties in City of London lost 11.6% of their value, giving an average price of £810,000.

An imbalance between supply and demand for properties saw house prices climb across the UK throughout the pandemic.

But experts say expectations have changed significantly in recent weeks amid mortgage rate rises, with the likelihood of a dampening effect on house price growth.

According to figures from Moneyfacts.co.uk On Wednesday, the average two-year fixed-rate mortgage on the market has a rate of 6.52% and the average five-year fix is at 6.36%.

There are around 900 fewer mortgage products available than there were on the day of the mini-budget in September.

Chris Druce, senior research analyst at Knight Frank, said: “Current activity in the housing market is being shaped by mortgage status.

“Those that can are pushing on and securing deals ahead of further increases, while others have paused plans to digest events.

“With affordability set to be a growing barrier for many homebuyers in the coming months, we forecast house price growth will slow from here, with price falls in 2023.”

First steps on the property ladder

First-time buyers in Kensington and Chelsea spent an average of £1,147,000 on their property – £57,000 less than a year ago, but £48,000 more than in August 2017.

By comparison, former owner-occupiers paid £1,544,000 on average in August – 34.7% more than first-time buyers.

Property types

Owners of semi-detached houses saw the biggest fall in property prices Kensington and Chelsea in August – they dropped 2.2% in price, to £3,962,389 on average. Over the last year, prices dropped by 3.6%.

Among other types of property:

Detached: down 1.7% monthly; down 5.3% annually; £3,825,147 averageTerraced: down 1.8% monthly; down 3.5% annually; £2,634,237 averageFlats: down 0.5% monthly; down 4.8% annually; £1,136,893 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 August. The average price paid would buy 11 homes in Burnley (£121,000), at the other end of the scale.

Across London, property prices are high compared to those across the UK, where the average cost £296,000.

Factfile

Average property price in August

Kensington and Chelsea: £1,336,232London:£552,755UK: £295,903

Annual change to August

Kensington and Chelsea: -4.5%London: +8.3%UK: +13.6%

Highest and lowest annual growth in London

Harrow: +15.9%City of London: -11.6%