Authored by the expert who managed and guided the team behind the United Kingdom Property Pack
Yes, the analysis of London's property market is included in our pack
If you're thinking about buying a property in London in 2026, you're probably wondering whether the timing is right or if you should wait for prices to drop further.
This article breaks down the current state of the London property market using the latest official data, portal figures, and expert forecasts so you can make an informed decision.
We constantly update this blog post to reflect the most recent housing prices in London, rental trends, and market conditions.
And if you're planning to buy a property in this place, you may want to download our pack covering the real estate market in London.
So, is now a good time?
As of early 2026, it's "rather yes" for buying property in London, especially if you're a patient buyer who can negotiate and pick the right home in the right area.
The strongest signal is that London prices are down 2.4% year-on-year in the official data, which means you're not buying into an overheated market and sellers are more willing to negotiate.
Another strong signal is that mortgage rates have started easing after the Bank of England cut the base rate to 3.75% in December 2025, improving affordability for buyers.
Other positive signals include wage growth outpacing house price growth at around 4.6%, more homes for sale than in recent years giving buyers better choice, and a general "buyer's market" feel especially for flats where negotiating power is strong.
The best strategy is to focus on family houses or well-maintained flats with long leases in outer boroughs like Lewisham, Bromley, or Waltham Forest if you want value, or established family areas like Wimbledon and Chiswick if your budget allows and you plan to hold long-term.
This is not financial or investment advice, and we don't know your personal situation, so please do your own research and consider consulting a professional before making any decisions.
Is it smart to buy now in London, or should I wait as of 2026?
Do real estate prices look too high in London as of 2026?
As of early 2026, London property prices look stretched but not dangerously so, with the average price around £547,000 while annual growth has turned negative at minus 2.4%, suggesting the market is working through an affordability adjustment rather than inflating further.
One clear signal in London listing data is that around half of the capital's 33 boroughs are showing year-on-year price declines, particularly the most expensive ones like Kensington and Chelsea where prices have dropped significantly, which tells you sellers are having to accept lower offers.
Another sign is that estate agents report the average time to secure a buyer in London has risen to around 63 days, slightly above last year, meaning homes are sitting on the market longer and buyers have more room to negotiate on price.
You can also read our latest update regarding the housing prices in London.
Does a property price drop look likely in London as of 2026?
As of early 2026, the likelihood of a sharp property price crash in London is low, but a continued gentle drift downward of 1% to 3% over the next 12 months remains plausible, especially for flats and prime central areas.
Looking at the realistic range for London property prices in 2026, most forecasters see anywhere from flat prices to modest growth of 1% to 2% for the mainstream market, while prime central London could see further small declines before stabilising.
The single most important factor that could trigger steeper price drops in London would be a significant rise in unemployment, because forced selling from distressed homeowners is what typically causes crashes rather than high interest rates alone.
Right now, the UK labour market remains relatively stable with unemployment contained, and the Bank of England is cutting rates rather than raising them, so the conditions for a crash look unlikely in the near term.
Finally, please note that we cover the price trends for next year in our pack about the property market in London.
Could property prices jump again in London as of 2026?
As of early 2026, the likelihood of a sudden price jump across London is low, though outer boroughs like Barking and Dagenham, Lewisham, and Havering could see modest gains of 3% to 5% as affordability there is less stretched.
Looking at the upside range, mainstream London could realistically see price growth of 1% to 3% over 2026 if mortgage rates continue to fall, while prime central London is more likely to stabilise than surge.
The biggest demand-side trigger that could push London prices higher would be a faster-than-expected drop in mortgage rates into the low 3% range, which would immediately boost what buyers can afford and pull more people off the sidelines.
Please also note that we regularly publish and update real estate price forecasts for London here.
Are we in a buyer or a seller market in London as of 2026?
As of early 2026, London is leaning toward a buyer-friendly market overall, with prices down year-on-year and sellers having to price realistically to attract offers, especially in the flat and prime segments.
In practical terms, London currently has elevated months of supply compared to the tight conditions of 2021 and 2022, and estate agents have the highest number of homes for sale in seven years, which gives buyers more negotiating leverage and time to make decisions.
The share of listings with price reductions has been notably high, with reports of record numbers of price cuts across the UK, and London sellers are increasingly accepting that the market has shifted in favour of buyers.
We have made this infographic to give you a quick and clear snapshot of the property market in the UK. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
Are homes overpriced, or fairly priced in London as of 2026?
Are homes overpriced versus rents or versus incomes in London as of 2026?
As of early 2026, London homes remain expensive relative to local incomes, but the gap is slowly closing because wages are rising around 4.6% annually while London house prices have been flat or falling.
The price-to-rent ratio in London varies significantly by area, but in many parts of the capital, buying costs around 20 to 25 times annual rent, which is above the 15 to 20 times range typically considered "balanced" and suggests renting still looks attractive for some.
The price-to-income multiple in London remains one of the highest in the UK, with homes costing roughly 12 to 14 times average local earnings, compared to a more affordable benchmark of 4 to 5 times income in balanced markets.
Finally please note that you will have all the indicators you need in our property pack covering the real estate market in London.
Are home prices above the long-term average in London as of 2026?
As of early 2026, London home prices remain high compared to the long-term historical average, but the market is clearly working off an affordability overshoot with annual prices down around 2.4% as buyers resist paying peak valuations.
The recent 12-month price change in London shows a decline, which contrasts with the UK average that is still showing modest growth of around 1.7%, suggesting London is correcting faster than the rest of the country.
When adjusted for inflation, London prices are actually well below their 2022 peak in real terms because general inflation has eaten into the value of property gains, meaning the "real" cost of housing has come down meaningfully even if nominal prices look high.
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What local changes could move prices in London as of 2026?
Are big infrastructure projects coming to London as of 2026?
As of early 2026, the most significant planned infrastructure project with potential to boost London property prices is the Bakerloo line extension, which has safeguarding in place for a route through Old Kent Road, New Cross, and toward Lewisham, though it is not yet fully funded or under construction.
The timeline for the Bakerloo line extension remains uncertain, with safeguarding providing a long-term commitment but actual delivery likely many years away, meaning any price impact will be gradual rather than immediate for areas like Peckham, Deptford, and Lewisham.
For the latest updates on the local projects, you can read our property market analysis about London here.
Are zoning or building rules changing in London as of 2026?
The most important planning change being discussed for London is the national Planning and Infrastructure Bill, which aims to speed up housing delivery and could eventually make it easier to build new homes in the capital.
As of early 2026, any positive effect from planning reforms on London property prices is likely to be gradual and medium-term rather than immediate, though even modest improvements in housing supply could help moderate price pressure over time.
The areas most affected by potential planning changes in London would likely be brownfield sites and regeneration zones in outer boroughs like Barking and Dagenham, Newham, and Hounslow where new development is already targeted under the London Plan.
Are foreign-buyer or mortgage rules changing in London as of 2026?
As of early 2026, foreign-buyer rules in London remain unchanged with the existing 2% non-UK resident Stamp Duty surcharge still in place, meaning international buyers continue to face higher costs especially in prime areas like Westminster and Kensington.
The most significant regulatory change affecting London landlords and investors is the Renters' Rights Act 2025, which is being phased in through 2026 and will ban Section 21 "no-fault" evictions, potentially prompting some landlords to sell up.
On the mortgage side, there are no major new restrictions being introduced, but lenders have been loosening criteria slightly by adjusting stress tests and loan-to-income rules, which should help more buyers qualify for mortgages in 2026.
You can also read our latest update about mortgage and interest rates in The United Kingdom.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in the UK versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
Will it be easy to find tenants in London as of 2026?
Is the renter pool growing faster than new supply in London as of 2026?
As of early 2026, tenant demand in London still outpaces new rental supply in most areas, though the gap has narrowed compared to the extremely tight conditions of 2022 and 2023 as more homes have come onto the rental market.
London continues to attract people for work, study, and lifestyle reasons, and the capital's population keeps growing modestly, which sustains underlying demand for rental homes across zones 1 through 6.
On the supply side, rental listings in London have increased by around 6% year-on-year according to Zoopla, which is slower than the national average of 15%, meaning London's rental market remains tighter than most other regions.
Are days-on-market for rentals falling in London as of 2026?
As of early 2026, the average time to let a rental property in London has actually increased to around 17 days nationally, and while London-specific data is tighter, the trend suggests rentals are taking slightly longer to fill than during the peak demand years of 2022 and 2023.
There is a notable difference between the best rental areas in London like Shoreditch, Islington, and Stratford, where well-priced properties still rent within one to two weeks, compared to higher-end or quirky properties that can sit for a month or longer.
One common reason days-on-market falls in London is undersupply combined with seasonal demand peaks, typically in late summer when students and graduates are searching, though 2026 is showing a more balanced market with less urgency than previous years.
Are vacancies dropping in the best areas of London as of 2026?
As of early 2026, vacancies in London's strongest rental areas like Shoreditch, Islington, London Bridge, Canary Wharf, and Stratford remain very low, typically below 2%, and these neighbourhoods continue to see steady tenant demand.
In these best-performing areas, vacancy rates are noticeably tighter than the broader London market, where some pockets with older stock or high service charges can see vacancies linger longer.
One practical sign that these prime rental areas are tightening first is that landlords in places like Clapham, Hackney, and Walthamstow are starting to see multiple applications within days of listing well-priced properties, even in January which is traditionally a quieter month.
By the way, we've written a blog article detailing what are the current rent levels in London.
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Am I buying into a tightening market in London as of 2026?
Is for-sale inventory shrinking in London as of 2026?
As of early 2026, for-sale inventory in London is not shrinking but has actually increased, with estate agents reporting the highest number of homes available for sale in around seven years, giving buyers more choice than they have had for a long time.
Months of supply in London has risen compared to the very tight conditions of 2021 and 2022, and the market now looks closer to "balanced" levels where neither buyers nor sellers have an overwhelming advantage, though it still varies by neighbourhood.
The main reason inventory remains elevated is that sellers who locked in low mortgage rates are hesitant to move and give up their cheap financing, but those who do need to sell are listing, and some properties that failed to sell are being added back to the market.
Are homes selling faster in London as of 2026?
As of early 2026, homes in London are generally not selling faster than last year, with the average time to secure a buyer around 63 days compared to 60 days at the same point in 2025, though well-priced family houses still move quickly.
Year-on-year, the median days-on-market for London properties has edged up slightly, reflecting a market where buyers have more choice and are taking their time to negotiate rather than rushing to compete.
Are new listings slowing down in London as of 2026?
As of early 2026, new listings in London appear cautious but not dramatically lower than normal, with sellers coming to market at a measured pace as many wait to see if conditions improve before committing.
Seasonally, January is typically a slower month for new listings in London, but the traditional "Boxing Day bounce" saw increased activity and we expect listings to pick up through spring as is the usual pattern.
The most plausible reason new listings are measured rather than surging is "rate lock-in" where homeowners with low fixed-rate mortgages from 2020 or 2021 are reluctant to sell and take on a new, more expensive mortgage, which constrains turnover.
Is new construction failing to keep up in London as of 2026?
As of early 2026, new housing construction in London continues to fall well short of demand, with completions running around 35,000 homes annually against a target of 52,000, creating a structural undersupply that supports prices long-term.
The recent trend in building permits and starts has been subdued due to high material costs, labour shortages, and viability challenges for developers, meaning the pipeline of new homes remains constrained.
The single biggest bottleneck limiting new construction in London is the combination of planning delays and high build costs, including land prices, which makes many developments financially unviable without significant affordable housing concessions.
We made this infographic to show you how property prices in the UK compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
Will it be easy to sell later in London as of 2026?
Is resale liquidity strong enough in London as of 2026?
As of early 2026, resale liquidity in London is adequate for most property types, though flats with short leases, building safety issues, or high service charges can take significantly longer to sell than houses in family-friendly areas.
The median days-on-market for resale homes in London is around 60 to 70 days to find a buyer, which is within a "healthy liquidity" range, though completion then typically takes another four to five months.
The property characteristic that most improves resale liquidity in London is being a well-maintained family house with good transport links, a strong school catchment, and clean legal paperwork, which consistently attracts multiple buyers even in slower markets.
Is selling time getting longer in London as of 2026?
As of early 2026, selling times in London have edged up slightly compared to last year, with the average time to secure a buyer now around 63 days versus 60 days a year ago, reflecting a market where buyers are less rushed.
The current median days-on-market in London varies widely, from around 30 to 40 days for well-priced family homes in sought-after areas to 90 days or more for overpriced flats or properties with complications.
One clear reason selling time can lengthen in London is affordability pressure, because when mortgage payments stretch buyers' budgets, they become more cautious, view more properties, and negotiate harder before committing.
Is it realistic to exit with profit in London as of 2026?
As of early 2026, the likelihood of exiting a London property with profit is medium to high if you hold for at least five to seven years, buy at a fair price, and choose a property with strong fundamentals like good location and condition.
The minimum holding period that typically makes exiting with profit realistic in London is around five years, which allows time for price appreciation to offset the significant transaction costs and market fluctuations.
Round-trip transaction costs in London are substantial, typically around 8% to 12% of the property value including Stamp Duty when buying (for example, £15,000 on a £500,000 home), plus legal fees, estate agent fees of 1% to 2% when selling, and other costs, which in total could reach £40,000 to £60,000 (roughly $50,000 to $75,000 or €47,000 to €70,000) on a typical London purchase.
The factor that most increases your odds of profit in London is buying below market value through negotiation in a soft market like now, and targeting high-demand segments such as family houses near good schools or well-connected flats in growth areas like Walthamstow or Lewisham.
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What sources have we used to write this blog article?
Whether it's in our blog articles or the market analyses included in our property pack about London, we always rely on the strongest methodology we can and we don't throw out numbers at random.
We also aim to be fully transparent, so below we've listed the authoritative sources we used, and explained how we used them and the methods behind our estimates.
| Source | Why it's authoritative | How we used it |
|---|---|---|
| UK House Price Index (GOV.UK / Land Registry) | Official government index based on actual completed sales across England and Wales. | We used it for London's latest average price of £547,000 and the annual change of minus 2.4%. We treat it as the anchor for all price discussions. |
| ONS Private Rent and House Prices | Official ONS bulletin combining housing sales inflation and rental inflation data. | We used it for London rent inflation at around 2.8% annually. We compare "buy vs rent" pressure using this source. |
| ONS Average Weekly Earnings | Official UK labour market statistics from the Office for National Statistics. | We used it to show wages growing at 4.6%, which helps London affordability when prices are flat or down. |
| Trading Economics (Bank Rate) | Widely-used aggregator of official Bank of England rate data, consistently updated. | We used it to confirm the current Bank Rate of 3.75% as context for mortgage affordability in January 2026. |
| Rightmove House Price Index | UK's largest property portal covering over 90% of listings with transparent methodology. | We used it for asking price trends, listing activity, and days-on-market signals. We treat it as a high-frequency market sentiment gauge. |
| Zoopla House Price Index | Major portal with consistent reporting and clear methodology for price and rental data. | We used it as a cross-check on momentum, rental trends, and supply levels. We look for agreement with Rightmove and UK HPI. |
| GOV.UK Stamp Duty Land Tax Rates | Official HMRC guidance for transaction taxes that buyers must pay. | We used it to explain true buying costs in London where Stamp Duty is often material, especially at higher price points. |
| GOV.UK SDLT for Non-UK Residents | Official rulebook for the 2% non-resident surcharge on property purchases. | We used it to assess foreign-buyer demand headwinds and where the surcharge bites most in prime London areas. |
| Renters' Rights Act 2025 Roadmap (GOV.UK) | Government's official phased plan for England's rental market reform. | We used it to assess how landlord economics might change and whether rental supply could shift in 2026. |
| Leasehold and Freehold Reform Act 2024 | Official statute text for leasehold rules that affect a huge share of London flats. | We used it as a risk flag for flat buyers, noting that rule changes affect pricing and liquidity for leasehold properties. |
| TfL Bakerloo Line Extension | Transport for London is the delivery authority, and this is the canonical project status page. | We used it to identify infrastructure-led demand areas like Old Kent Road and Lewisham for neighbourhood-level analysis. |
| GOV.UK Housing Supply Statistics | Official measure of net new homes added in England including London. | We used it to ground the "is supply keeping up?" conversation in hard numbers showing London's chronic undersupply. |
| UK Finance Mortgage Market Forecasts | Industry body representing major lenders with documented forecasting methodology. | We used it for the macro credit availability direction into 2026 and to cross-check against rate moves. |
| GLA Towards a New London Plan | Official direction of London's planning strategy and future housing targets. | We used it to identify policy-driven supply shifts that could affect price pressure over 2026 and beyond. |
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of the UK. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
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