ULEZ causes house prices to plummet in London

Despite London Mayor Sadiq Khan praising ULEZ, new research suggests it is damaging property prices in London.

According to estate agents Benham and Reeves, houses in ULEZ boroughs have been hardest hit.

London Mayor Sadiq Khan introduced the Ultra Low Emission Zone (ULEZ) to improve air quality in London. It was first introduced to cover central London and was expanded on 2023 to include all London boroughs.

Benham and Reeves say many London homeowners feel penalised for living in the capital.

House price drop

The original introduction of ULEZ in 2019 covered the London boroughs of Camden, Westminster, Lambeth, Southwark, Islington, and Hackney, along with the City of London.

Research reveals that in 2020, house prices across London increased by 1.4%, while these ULEZ boroughs saw house prices rise by 5.9%.

However, since then, house prices in these London boroughs have plummeted by nearly 6%, while house prices in the capital have soared by 9.2%.

House prices in the boroughs impacted by ULEZ have fallen by an average of 3.6%

The first expansion phase of ULEZ in 2021 saw Hammersmith and Fulham, Haringey, Kensington and Chelsea, Lewisham, Newham, Tower Hamlets, Wandsworth, and Waltham Forest added to the ULEZ zone.

In the year that followed, house prices across these boroughs climbed by 3.8%, compared to 6.4% across London.

However, between October 2021 and 2025, London’s overall house price growth has slowed to just 1.7%. In contrast, house prices in the boroughs impacted by ULEZ have fallen by an average of 3.6%.

Phase three of the ULEZ implementation and the second phase of expansion saw a further 18 London boroughs fall within its boundaries as of August 2023.

Over the following year, house price growth across these additional boroughs lagged behind the wider London average, rising by just 1% compared to 1.8% across the capital as a whole.

London homeowners feel they have been penalised financially for living within the capital

Director of Benham and Reeves, Marc von Grundherr, says many London homeowners have been financially impacted by ULEZ.

He said: “The evidence suggests the Ultra Low Emissions Zone has had a very positive impact on the capital’s air quality and this is certainly a positive.

“However, its implementation and expansion have been met with a great deal of controversy over the last five or so years, particularly by London homeowners who feel they have been further penalised financially for living within the capital.

“Whilst it hasn’t been a predominant factor, it has certainly contributed to more buyers being pushed from the inside out, as they look to reduce both the cost of buying and ongoing cost of living in the face of a far higher cost of living, not to mention higher mortgage rates.”

However, Mr Grundherr adds that ULEZ could eventually have a positive impact on the property market.

He said: “Many other cities around the world place a high importance on improving air quality and so whilst we’re certainly seeing a period of adjustment within the property market, in the long run, the ULEZ could well become a factor that attracts homebuyers, rather than deterring them.”