How Much Do Houses in London Actually Cost?

London’s property market is often perceived as one of the most expensive globally, a reputation that holds true for many seeking a home in the city. Navigating this market requires a clear understanding of the financial landscape involved. This article explores the current costs associated with London housing, delving into average prices, the factors that shape them, variations across different areas, and the additional expenses incurred during a property purchase.

Average House Prices in London

The average house price in London stood at approximately £561,000 in June 2025. This figure is substantially higher than the UK national average, which was around £269,000 during the same period. For England as a whole, the average property value reached £291,000 in June 2025. Flats were the most commonly sold properties in London over the last year, with an average price of £546,117. Terraced houses commanded a higher average of £758,798, while semi-detached properties were priced at about £773,552.

Factors Influencing House Prices

Several characteristics impact property values within London’s housing market. The type of property plays a significant role, with detached houses commanding higher prices than semi-detached, terraced homes, or flats due to greater space and privacy. Property size, measured by the number of bedrooms or square footage, directly correlates with price, as larger homes have higher values.

The condition of a property also influences its cost; new builds or recently renovated homes sell for more than properties requiring extensive work. Location-specific amenities are another driver of value. Proximity to efficient transport links, such as underground stations or major train lines, can significantly boost prices. Access to green spaces, local shops, and the quality of nearby schools contribute to a property’s desirability and market price.

House Prices Across London Boroughs

House prices vary considerably across London’s boroughs, reflecting the unique characteristics and amenities each area offers. Kensington and Chelsea rank as the most expensive borough, with an average property price of approximately £1.46 million in June 2025. This area is known for its elegant architecture, cultural institutions, and high-end shopping.

Westminster also shows high average prices, around £1.035 million in June 2025. Other expensive areas include Camden, where average prices reached £876,065 in June 2025, and the City of London, with an average of £845,614. These central locations benefit from extensive transport networks and proximity to business and entertainment hubs.

Some boroughs offer more affordable options. Tower Hamlets, for instance, had an average house price of £575,183 in April 2024, while Barking and Dagenham and Bexley are also among the more accessible. These boroughs provide diverse housing stock and good community amenities, though they may be further from central London.

Additional Costs When Buying a House

Beyond the agreed-upon purchase price, buyers in London face several significant financial outlays. One of the most substantial is Stamp Duty Land Tax (SDLT), a tiered tax levied on residential property purchases in England.

As of April 1, 2025, standard residential SDLT rates are 0% on the first £125,000 of the property value, 2% on the portion from £125,001 to £250,000, 5% from £250,001 to £925,000, 10% from £925,001 to £1.5 million, and 12% on any value above £1.5 million. An additional 5% surcharge applies if the buyer is purchasing an additional residential property. First-time buyers can claim relief, paying no SDLT on properties up to £300,000 and 5% on the portion between £300,001 and £500,000; however, if the property costs more than £500,000, standard rates apply.

Legal fees, paid to a solicitor or conveyancer for handling the legal aspects of the property transfer, typically range from £1,575 to £2,000, plus disbursements. These disbursements include costs for property searches, which can be £250-£450, and Land Registry fees. Land Registry fees, which cover the registration of new ownership, range from £20 to £500 depending on the property’s value.

Mortgage arrangement fees, charged by lenders for setting up the loan, can vary from £0 to £2,500, while a non-refundable booking fee might be £100 to £300. Buyers also typically incur valuation fees, averaging around £361, for the lender’s assessment of the property’s worth, though these are sometimes covered by the lender. Additionally, survey fees, ranging from £400-£1,000 for a HomeBuyer Report or £600-£1,500 for a more comprehensive Building Survey, are paid for a detailed inspection of the property’s condition. Other potential costs include removal expenses.