London Property Market Trends

The London property market has entered 2026 with signs of measured recovery.

Across both sales and lettings, the market is beginning to find its footing after the December slowdown. Activity is improving, though selectively, as buyers remain value-conscious, tenants continue to compete for quality stock and landlords prepare for structural change under the approaching Renters’ Rights Act.

Here is what we are seeing on the ground.

Demand Is Building, Not Boiling

A London property prices rose by 2.8% month on month in January. While annual growth remains modest at 0.9%, this points to stabilisation after a cautious 2025 rather than rapid expansion. It is not dramatic growth, but it is steady, which is exactly what the market needed after a cautious 2025.

More telling, however, is buyer behaviour.

Our own data shows buyer enquiries up 25% year on year in January, albeit from a more subdued base in early 2025.

On the lettings side, momentum has been sharper still. Properties that were taking over two weeks to let in December were securing tenants within three days by January. Applicant appointments are up 18% year on year, with competition per property rising by 10%.

Supply is gradually improving, but it has not yet caught up with sustained tenant demand. As a result, London rents are forecast to rise by 2% in 2026, according to Rightmove.

This is not a return to the conditions of 2021 or early 2022. Pricing remains sensitive, buyers remain value-conscious and policy reform continues to shape behaviour. What we are seeing is not exuberance, but early signs of a more balanced and disciplined market.

Regulation Is Reshaping the Rental Landscape

Running alongside renewed activity is reform.

The Renters’ Rights Act will introduce the most significant changes to the private rented sector in a generation, with the majority of provisions expected to come into force from 1 May 2026.

Key changes include:

The end of fixed-term ASTs, with tenancies moving to periodic

Abolition of Section 21, replaced with revised possession grounds

Tighter rules around rent increases, advance rent, bidding, pets and discrimination

Greater scrutiny of compliance, documentation and property standards

This is not a short-term policy tweak. It is structural reform.

For landlords, preparation is critical. Compliance, tenancy documentation and portfolio strategy will need to be reviewed well ahead of implementation. For professional landlords, this shift also creates opportunity. Well-managed, compliant stock will become even more valuable in a more regulated environment.

Improved access to buy-to-let finance is supporting this confidence. Specialist lenders are re-entering the market with competitive fixed products, helping investors reassess London with greater certainty.

Policy Pressure and London Resilience

Wider tax policy continues to shape sentiment at the upper end of the market. In a recent piece for City AM, our CEO James Evans commented on what 2026 may hold for London property owners, including the proposed Mansion Tax on homes valued above £2m and upcoming council tax increases from 2028.

While these measures will generate debate, London has consistently demonstrated an ability to absorb policy change.

Life events drive housing decisions. School moves, career shifts, international relocations and lifestyle changes do not pause for fiscal reform. The capital’s depth of demand across a broad range of price points remains one of its defining strengths.

James explores this in more detail in his recent City AM commentary on what 2026 could mean for London property owners.

What This Means Now

2026 is not defined by frenzy. It is defined by clarity.

Buyers are active, with greater confidence around affordability

Tenants are moving quickly in a market where quality stock is still scarce

Landlords are entering a more regulated era that will reward structure and professionalism

Policy remains a factor, but not a deterrent

London is adjusting, not retreating.

For property owners, this is a year to be informed, decisive and well advised. Whether you are considering selling, reviewing your portfolio or preparing for the new regulatory framework, the opportunity lies in acting with strategy rather than reacting to headlines.

If you would like clear, considered advice on what these changes mean for your property plans in 2026, contact our team at [email protected]