London house prices set to barely budge in 2026
Property prices in London are set to rise only marginally next year after falling in 2025 as the capital faces continued housing pressure.
London has been hit by a combination of unaffordability and high supply this year, with sellers struggling to push through deals and buyers often able to negotiate prices downward.
Government data on Wednesday showed a 2.4 per cent fall in house price in London year on year, to £547,000.
Research from Rightmove has London house prices will rise by just over one cent next year, versus a two to three per cent increase in prices on average in the UK.
London and the south will “lag” according to Rightmove, with the top-end of the market expected to be especially slow – despite a degree of post-budget relief.
Colleen Babcock, Rightmove’s property expert, said that 2026 will see “new themes emerging” in Britain’s property market.
“We predict the market will look and feel very different depending on which area of Great Britain you’re in, and the type of property you’re looking to sell or buy, with big differences particularly between the south of England and the rest of Great Britain,” Babcock said.
She added that market conditions will “favour typical first-time buyers over those at the top-end of the market,” partly due to a glut of supply at the top-end.
Housing market to stabilise in 2026
Despite the sluggish growth, a return to a certain policy environment will be a welcome relief for both buyers and sellers.
The 2025 market has been peppered with uncertainty and scrambles, whether that’s a pre-budget freeze as mansion owners fear an annual tax on their property, or a rush from first-time buyers to secure homes ahead of the March deadline for the stamp duty holiday.
Amy Reynolds, head of sales at Richmond estate agency Antony Roberts, said that even the London market is becoming more “contstructive”.
“For London buyers, [lower interest rates are] already feeding through to more competitive mortgage pricing and renewed confidence, which should underpin transaction volumes and support modest price growth, rather than a sharp rebound or further correction,” Reynolds added.
Rightmove expects average wage growth to outpace housing growth throughout the year, improving buyer affordability and promising a steadily improving market.
First-time buyers will also be able to benefit from looser mortgage rules thanks to loan-to-income and stress rate changes put in place earlier this year.
“Overall, 2026 appears set to be a year of cautious confidence… It’s positive to see analysis pointing to a housing market that is slowly regaining its footing rather than racing ahead,” Mary-Lou Press, President of the National Association of Estate Agents (NAEA), Propertymark, said.