By the Location Location team – independent in Hackney for 20 years, and currently ranked the UK’s Best
Overall Estate Agency. Published September 2026.
Quick answer: UK house prices have just recorded their first annual fall in three years, and here in
London they’re down further still. That sounds like bad news, and it can be. But if you’re upsizing, a falling market can work strongly in your favour: more expensive homes typically fall by more in cash terms than cheaper ones, which narrows the
trading gap between what you sell for and what you pay for your next home. Time it right, and that
narrowed gap can be worth tens of thousands of pounds, money most people never realise was on
the table, because they were too busy worrying about the market to look at the maths.
Last week, the Lloyds House Price Index confirmed what a lot of people have been sensing for a
while: UK house prices have fallen annually for the first time since November 2023, down 0.4%
nationally to an average of £298,468. Here in London specifically, prices are down 1.5% year on year,
to an average of £534,177.
Most people read a headline like that as a reason to sit tight. If you’re planning to upsize, though, it’s
worth reading it differently, because it might be one of the better windows you’ll get for years. This
isn’t the angle you’ll usually hear from an estate agent, because it isn’t really about how many
homes are selling. It’s about a piece of maths almost nobody explains properly: the trading gap.
What “the market is falling” actually means
A national or city-wide percentage is a useful headline, but it isn’t what actually affects you when
you move house. What affects you is entirely relative: your current home is worth a bit less than it
would have been a year ago, and so is the home you want to buy. The question that actually matters
isn’t “have prices fallen,” it’s “has the gap between the two prices changed,” because that gap is the
bit you personally have to bridge, with savings, with a bigger mortgage, or with both.
The trading gap: the bit nobody explains
Here’s the part that gets missed almost every time this topic comes up. If your current home and
your target home both fall by the same percentage, the gap between them doesn’t stay the same in
cash terms, it narrows, because a percentage of a bigger number is a bigger number. And in practice,
it’s usually better than that, because more expensive homes tend to fall by more than cheaper ones
in a slowing market, not just in percentage terms but disproportionately so.
Here’s a worked, illustrative example to show what that actually looks like in pounds. Say you’re
selling a flat worth around £500,000, in a segment of the market that’s tracking London’s broad
annual fall of 1.5%. Over the past year, that home has effectively lost around £7,500 in value. Now
say the family home you want to move into is priced around £1,200,000, in the segment of the
market where TwentyEA’s own data shows prices have fallen by more than 5% over the same
period. That home has effectively lost around £60,000 in value.
Put those two numbers together, and the picture changes completely. You’ve “lost” roughly £7,500
on the home you’re selling, but you stand to save roughly £60,000 on the home you’re buying. Net
effect: you’re around £52,500 better off than you would have been moving at last year’s prices, not
because you found a bargain, but simply because of where you sit on the ladder while the market is
doing what it’s doing. That’s the trading gap closing in your favour, and it’s real money, not a
theoretical exercise.
Why bigger homes fall further
This isn’t a coincidence, and it isn’t specific to one street or one month. Homes at the higher end of
the market are more sensitive to mortgage rates, because a bigger loan means a bigger monthly
repayment for every fraction of a percentage point rates move. They’re also more discretionary:
most people buying a family home in the million-pound-plus bracket could choose to stay put if the
numbers don’t work for them, in a way that someone who genuinely needs to move for space or a
growing family often can’t. Fewer motivated buyers chasing that stock means sellers in that bracket
have to work harder to attract interest, and price is usually where that shows up first. TwentyEA’s
own Q2 2026 data bears this out directly: while achieved prices across the market overall were
roughly flat, up just 0.1% annually, properties priced above £1 million fell by more than 5% over the
same period.
So is now actually a good time to upsize?
If you’re moving into a meaningfully higher price bracket, the maths in this piece is genuinely on
your side right now, more so than it has been in the past three years, and arguably more so than it
will be once the current stand-off breaks. That’s not a blanket “buy now” message for everyone. If
you’re moving sideways into a similarly priced home, or downsizing, the trading gap argument
doesn’t help you in the same way, and the case is much more about your own personal
circumstances than the market.
It also isn’t a passive strategy. The sellers currently getting the benefit of this gap are the ones in a
genuinely proceedable position, ready to act, not the ones who like the idea but haven’t sorted a
mortgage in principle or had a conversation with an agent yet. We’ve written before about why
getting your own sale moving first matters more than people think, and about the difference a
properly proactive agent and conveyancer make to actually getting a sale over the line. Both of those
pieces matter even more here, because a narrowing trading gap is only worth anything to the people
who are actually in a position to move through it before it closes again.
Frequently asked questions
Is now really a good time to move house if prices are falling?
It depends on the direction you’re moving in. If you’re upsizing into a meaningfully higher price
bracket, a falling market can work strongly in your favour, because more expensive homes tend to
fall by more in cash terms. If you’re moving sideways or downsizing, the case is far less clear cut and
comes down more to your personal circumstances than to market timing.
Why do bigger, more expensive homes fall by more than cheaper ones in a downturn?
Mostly because they’re more sensitive to mortgage rates and more discretionary. A bigger loan
means a bigger change in monthly cost for every rate movement, and buyers at that level are more
able to simply wait if the numbers don’t work, which reduces demand and pushes prices down faster
than in the more urgent, lower end of the market.
What is the “trading gap,” in simple terms?
It’s the difference between what you sell your current home for and what you pay for your next one,
the amount you personally have to bridge with savings or borrowing. When both properties fall in
value by the same percentage, that gap narrows in cash terms. When the more expensive property
falls by more, as is common in a downturn, the gap narrows further still.
Will this window stay open?
Not indefinitely. Pent-up demand from buyers and sellers currently waiting to see what happens
tends to arrive in a rush once confidence returns, pushing competition and prices back up quickly.
Early signs, like buyer searches already running 7% ahead of last year, suggest interest may be
rebuilding before that shift becomes obvious in completed sales.
Does this apply everywhere in the UK, or just London?
The specific percentages vary by region, some parts of the UK are still seeing modest annual growth
rather than falls, but the underlying pattern, that higher-value homes tend to move by more than
lower-value ones in both directions, holds well beyond London. It’s worth checking the current
figures for your own area and price bracket rather than assuming the national or London numbers
apply directly.
Sources: Lloyds House Price Index, August 2026 data (published 8 September 2026); Rightmove property ladder price gap
analysis, March 2026; TwentyEA Property & Homemover Report, Q2 2026; Zoopla House Price Index, August 2026; RICS UK
Residential Market Survey, 2026, via The Negotiator. The £500,000 and £1,200,000 worked example is an illustrative
scenario built from real, reported percentage movements, not a claim about any specific property.
This piece follows on from our earlier articles, “Should You Sell Before You Buy?” and “Why Are Some Hackney Sellers Benefiting from a Better Chance of Selling?
