Last month, a new account called London Price Drop appeared on X. It has already gained more than 14,000 followers simply by posting screenshots from Rightmove, which illustrate how properties in the capital are falling sharply in value. One of these is a leasehold flat in Shepherd’s Bush purchased for £425,000 in 2017, before being re-listed for £395,000 in May 2024, and eventually sold for £325,000 last August. Adjusted for inflation, that represents a real terms loss of close to £250,000.

The London Price Drop account is so popular because it contradicts an assumption that many in Britain hold dear. Young or old, owner or renter, almost all of us believe that buying property is the route to wealth, and that house prices, in the long run, always go up. It’s scary and surprising then to discover that properties, especially flats, inside the M25 are losing their value so quickly.

In the past decade, flats in London have lost a quarter of their value – 40 per cent in some central locations

In the past decade, flats in London have lost a quarter of their value – 40 per cent in some central locations

We shouldn’t be shocked, though. The evidence has been clear for two decades: buying property in London is increasingly a mug’s game. In the capital, in the year to the end of January, prices have edged down in nominal terms (actual cash value, excluding inflation), falling by 1.7 per cent even as core inflation – which excludes energy and food – averaged 3.1 per cent. This is not a brief stumble: in real terms the average increase in value of a property bought in London 20 years ago is 13.1 per cent. For context, if in 2006 an individual had put their money into an index fund tracking the US stock market, the investment would have increased by more than 300 per cent in real terms.

The picture is worse over the past decade. In that time, flats in London have lost on average 26.7 per cent of their value, with drops of more than 40 per cent for central locations. In the capital, there has been a correction in the housing market happening for some time. But because there has not been a sharp nominal drop, this correction has been mostly hidden from view.

Take another listing posted on London Price Drop: a leasehold flat in Kilburn, purchased for £825,000 in 2015. The buyer might well have been a millennial who had endured a difficult employment market after graduating. Defying the odds, scrimping and saving, or more likely with some help from the Bank of Mum and Dad, they were able to scrape together a deposit. Ten years later, in 2025, the going rate for their property is £646,000. The declining value of their property leaves them........

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