Some previously sought-after UK areas have seen average property values plunge by as much as 60% over the last 12 months, according to a new report. The reasons for the drops vary, but include tax pressures, wealth outflows, and local economic downturns.
Although UK house prices have not fallen overall during the period, some regions - including prime central London and parts of Southern England - have seen values decline. Soaring mortgage rates have added significant pressure on buyers' budgets and reduced maximum borrowing capacities.
Notting Dale leads the fall
The report from MG Timber and Online Marketing Surgery, using the latest data from the Office for National Statistics (ONS), shows the average price of homes in Notting Dale, London, has dropped from £1,285,000 in March 2025 to £520,000 in March 2026 - a 60% fall in one year.
The Five Ways South and Calthorpe Park area of Birmingham saw a 51% drop in average house prices over the same period, with homes falling from £500,000 to £245,000. In County Durham, Easington and Hawthorn saw prices drop by 37%, while Harraton, Rickleton and Fatfield fell by 36%. In London, Shadwell North in Tower Hamlets dropped 37% and Elephant and Castle in Southwark fell 35%.
Market unevenness and mortgage pressures
The latest UK House Price Index data shows the average house price is £273,000, rising to £550,000 in London. A spokesperson from Online Marketing Surgery said: "This report shows how uneven the UK property market is right now, with median prices in Notting Dale, part of the affluent borough of Kensington and Chelsea, falling by 60%. It's a clear reminder of how much location and demand can influence property values."
Matt Smith, a mortgage expert from RightMove, noted an "uplift in buyer activity" across the nation last month, but said affordability remains a "significant challenge" due to mortgage rates. He said: "Mortgage rates have risen again over the past month, adding further pressure to monthly budgets, and the uncertainty over what may happen to rates in the medium term is likely holding back some potential movers."
UK mortgage rates have more than doubled since 2015, moving from under 2% to between 5% and 6% this year. Higher rates reduce buyers' purchasing power and lower market demand. For example, a £1,200 monthly budget at a 4% mortgage rate supports a borrowing capacity of around £250,000, while the same amount at 7% only supports around £185,000.
Regional selling differences
Falling wages have also reduced the maximum mortgage amounts buyers can secure, leading to slower sales and prompting sellers to accept aggressive discounts. In high-end areas such as central London, the proposed "mansion tax" has pushed down average house prices, with values previously predicted to fall by 11% in Kensington and Chelsea between May 2025 and May 2026.
Colleen Babcock, a property expert at RightMove, added: "Whilst almost two-thirds of homes are still successfully finding a buyer, the chances of selling vary significantly depending on where you live. Over 90% of homes that come to market for sale are selling in Scotland versus less than half in London, meaning those who want to sell will have to set their pricing according to local market conditions."
The areas with the highest average price drops from March 2025 to March 2026 are: Notting Dale (£1,285,000 to £520,000, 60%), Five Ways South & Calthorpe Park (£500,000 to £245,000, 51%), Isles of Scilly (£565,000 to £315,500, 44%), Five Ways North (£195,000 to £121,000, 38%), Central Birmingham (£264,000 to £165,000, 38%), Easington & Hawthorne (£147,000 to £92,000, 37%), Shadwell North (£582,500 to £365,000, 37%), Harraton, Rickleton & Fatfield (£252,500 to £162,000, 36%), Elephant & Castle (£693,000 to £450,000, 35%), and North Hyde & North Cranford (£482,500 to £315,000, 35%).
