London’s Property Market in 2026: Prices, Rents and New-Build Supply, by the Numbers
London’s housing market in 2026 is soft on prices and firm on rents. The average London house price was £569,000 in July 2026, down 3.3% on a year earlier. It was the eleventh consecutive month of annual falls in the capital and the lowest annual change of any English region. Meanwhile the average London private rent reached £2,332 a month in August 2026, up 3.5% on a year earlier.
Supply is the third part of the picture. London added 32,680 net new dwellings in 2024 to 2025, but by mid-2026 new starts were running at around a tenth of the city’s annual target, held back by building-safety approvals and the tax burden.
Below are the figures as of October 2026, each with its date. House-price figures are provisional and revised in later months. We do not forecast prices or quote a rental yield.
House prices: London against the rest of the country
| Area | Average price, July 2026 | Change over 12 months |
|---|---|---|
| London | £569,000 | -3.3% |
| England | £293,000 | +1.1% |
| United Kingdom | £273,000 | +1.4% |
London’s average is close to twice the England figure, but its prices are moving the other way from the rest of the country, where the North East recorded the highest annual growth at 4.9%. Inner London was hit hardest by the falls. For a buyer from abroad, this cuts both ways: prices are lower than a year ago, and there is no sign yet of when the falls will stop.
The next release, with August 2026 prices, is due on 21 October 2026. Check it, and the revisions to earlier months, before relying on any of these numbers.
New-build and existing homes
Split by type, the London figures for May 2026 give an average new-build price of £509,334, down 1.2% on a year, and an average existing-home price of £549,723, down 3.2%.
It would be wrong to read this as “new builds are cheaper”. The new-build average is lower mainly because the mix differs: London new builds are mostly flats, while existing homes include houses of every size. What the split does suggest is that, in the year to May 2026, the average for new-build sales fell less than the average for existing homes. A single month’s split is a snapshot, and the figures are provisional, so treat it as a signal to watch rather than a trend.
Fewer sales
Sales volumes have fallen alongside prices. London had 4,006 sales in May 2026, against 5,139 in May 2025. Volumes for the latest two months are not yet reliable, so May is the most recent month worth comparing.
On resale, 19.9% of flat sellers across England and Wales sold for less than they paid in 2025. That figure covers all flats, not just London new builds, but it is a reminder that a flat is not automatically worth more when you come to sell it.
Rents: still rising
Rents are moving the other way. London’s average private rent was £2,332 a month in August 2026, with annual rent inflation of 3.5%, up from 3.0% in July. The UK average was £1,400 a month, up 3.8%. London is neither the fastest- nor the slowest-growing region: the North East and North West led at 5.8%, and the South East was lowest at 3.0%.
Two points matter for a buyer who plans to let. These are averages across all private rentals, not the rent any particular flat will achieve. And since 1 May 2026, the Renters’ Rights Act limits rent increases on an existing tenancy to once a year, with tenants able to challenge above-market increases at a tribunal. Our guide to renting out a London flat covers the rules.
Costs on the owner’s side have risen too. The average London service charge on flats listed for sale was £2,801 a year in 2025, up 6.4% on the year and 41.2% over five years. What a landlord keeps depends on both lines, not on the rent alone.
New-build supply: completions and the pipeline
England added 208,600 net additional dwellings in 2024 to 2025, down 6% on the previous year, of which 190,600 were new-build completions. London’s figure was 32,680 net additional dwellings.
The pipeline is slowing further. By June 2026, new starts in London were running at around 10% of the annual new-homes target set by the housing ministry, and a London apartment building took at least eight years from acquisition to completion, against five years a decade earlier. On 1 April 2026 Berkeley Group, a developer working in London and the South of England, stopped buying new land, except through joint ventures, for as long as current tax and regulatory conditions last. The Building Safety Levy was among its reasons.
The regulator’s timetable is part of the story. Approvals for high-rise schemes at Gateway 2 have run well beyond the 12-week statutory target, averaging 25 weeks in early 2025, with a median of 37 weeks for legacy cases by the end of that year and some improvement in 2026. A new levy on residential floorspace has also applied since 1 October 2026. Fewer starts today mean fewer completions in the years ahead. What that will do to prices is still an open question.
How the market feels to a developer
Berkeley’s year to 30 April 2026 gives a view from the sales office. Its sales reservations were around 15% below the run-rate of the previous two years, in a market marked by caution and little urgency, and off-plan sales suffered more from that lack of urgency than sales of completed homes.
For an off-plan buyer, that is useful context for negotiation and for risk. Buyers who commit early do so at today’s price for a completion that may be years away, and London’s average price has been falling for most of the past year. Our off-plan checklist covers the protections and the risks.
Dates to watch
| Date | What happens | Status |
|---|---|---|
| 21 October 2026 | August 2026 house prices and September rents are published | Scheduled |
| 28 October 2026 | Autumn Budget, including the rules of the proposed “Your First Home” scheme | Scheduled |
| 5 November 2026 | Next Bank of England Bank Rate decision (currently 3.75%) | Scheduled |
| Late 2026 | Regional rollout of the private landlord database | Announced |
| 6 April 2027 | Property income tax rates of 22%, 42% and 47% | Legislated |
| April 2028 | High Value Council Tax Surcharge on homes worth £2 million or more | Announced, not law |
For context on borrowing, Bank Rate was held at 3.75% on 17 September 2026. We do not quote mortgage rates, which depend on the lender and the borrower; our guide to mortgages for non-UK residents explains what lenders look for.
Tax measures are shown as they stood in October 2026, before the Budget; announced measures are not law until legislated.
Reading the numbers before you buy
We do not publish a rental yield for London new-build flats. If you are shown one, ask which rent and which price it was worked out from. The only yield that matters is the one for the specific flat, from its actual expected rent and its price after costs.
Currency is the other number. Prices, rents and service charges are all in pounds sterling, so a buyer whose money is in another currency carries exchange-rate risk on every payment and on the eventual sale proceeds. A London price that is flat in pounds can look quite different in dollars, euros or dirhams.
- Check the date of every figure. House-price data runs about two months behind and is revised.
- Compare like with like: a London-wide average says little about one block in one borough.
- Budget for costs that the averages leave out: Stamp Duty at overseas rates, service charges and tax on rent. Our guides to Stamp Duty and running costs set them out.
- Re-check the tax figures after the Budget on 28 October 2026.
The London homes we currently work with are on our United Kingdom properties page.
