London house prices fell 3.7% in May compared with a year earlier, marking the largest annual decline since December 2023. Data from the Office for National Statistics showed London was the only region where prices dropped, while UK-wide house prices rose 2.7%. The falls were steepest in inner London areas such as Westminster and Tower Hamlets. The statistics office cautioned that annual figures were distorted by a change in transaction taxes in April 2025, which prompted buyers to rush through deals ahead of a stamp duty increase, causing sharp swings in demand, especially in expensive areas like London.