The October 2025 read of our London factor model shows a market still being carried by quality-adjusted price growth while specific hedonic factors — particularly size and energy efficiency — continue to drag. With three months of buffer from the rolling-window noise, this update focuses on the year to October 2025 and the most recent 3-month window (July → October 2025), based on HM Land Registry transactions joined to MHCLG EPC certificates.
The Baseline Market — the quality-adjusted intercept of our cross-sectional regression — returned +9.4% over the twelve months to October 2025, and +4.7% in the most recent 3-month window. That is the bulk of the headline movement: every other factor is operating on a much smaller scale. Cumulative Baseline Market return since 1995 now stands at +589.1%, consistent with London's long-run quality-adjusted trend.
Two factors are doing meaningful work on the downside. Floor Area returned -3.8% over the last twelve months — and crucially, all of that movement is concentrated in the most recent 3 months (also -3.8%). In plain terms: the per-sqm premium paid for larger units has compressed sharply since mid-2025, with smaller stock holding price better than bigger stock. The energy_score factor returned -4.1% year-on-year and -0.9% in the latest 3 months, extending the EPC-linked repricing that has been visible in London since the 2023 regulatory uncertainty. Cumulatively, energy_score is now -9.8% since dataset start — the weakest factor in the model.
The house-vs-flat tilt (is_house) returned -1.2% over the year, a modest continuation of the relative re-rating of flats. Price Tier, Location Premium, and Freehold all moved within ±0.1% and are effectively flat.
| Factor | 12-month return | 3-month return | Interpretation |
|---|---|---|---|
| Baseline Market | +9.4% | +4.7% | Quality-adjusted market-wide repricing; the dominant signal. |
| Floor Area | -3.8% | -3.8% | Sharp recent compression of the per-sqm premium on larger units. |
| energy_score | -4.1% | -0.9% | Continued EPC-linked discount on weaker-rated stock. |
| is_house | -1.2% | -0.2% | Houses giving back a modest premium versus flats. |
| Location Premium | +0.0% | +0.0% | Postcode-tier spreads broadly unchanged year-on-year. |
| Freehold | +0.1% | -0.0% | Tenure premium effectively flat. |
Stripping out Baseline Market (which dominates the axis), the small-magnitude factors tell a clearer story when plotted as cumulative curves from late 2018. Floor Area and energy_score have been the persistent underperformers; is_house has been volatile but net negative.
The notable signal in the October 2025 read is that Floor Area's twelve-month drag is entirely a 3-month event. That can either reverse as the rolling window updates, or it can mark the start of a deeper compression of the size premium — something we have seen before in London (notably mid-2022). The continued slow bleed in energy_score is the more structural story and aligns with how the EPC-linked discount has tracked since regulatory expectations shifted.
Interactive charts for every factor, updated monthly.
Open London Factors →Methodology: rolling 3-month cross-sectional OLS of log(price/sqm) on property characteristics, HM Land Registry joined to MHCLG EPC. Full specification at about.