London buyer demand eases but wider economy remains resilient
Buyer demand across London softened further in April as geopolitical uncertainty continued to impact market sentiment following the conflict in the Middle East. However, economic data and wider housing market trends point to a more resilient outlook than many expected.
April data from Chestertons showed buyer enquiries were 14% lower than in April 2025. While demand remained subdued, this marked an improvement on March, when enquiries were down 20% year-on-year during the first full month following the outbreak of hostilities on 28 February.
Viewings and offers were also lower than the same period last year, down 13% and 12% respectively.
Despite ongoing uncertainty, the wider economic backdrop has remained relatively stable.
Bank of England keeps rates on hold
The Bank of England voted 8-1 to hold interest rates steady for a second consecutive month on 30 April.
At the same time, UK GDP rose by a stronger-than-expected 0.5% in February, according to the Office for National Statistics, while unemployment fell from 5.2% in January to 4.9%.
Mortgage approvals across the UK also increased in March for the first time in six months, suggesting that underlying buyer demand remains present despite geopolitical concerns.
Housing transactions also continued to recover during March following disruption linked to the end of the Stamp Duty holiday earlier this year.
House price growth strongest in northern regions
House prices across the UK have continued to rise overall, although growth has slowed compared to last year.
Northern regions of England have seen the strongest performance, while parts of southern England, including London, have experienced weaker price growth.
According to the ONS, UK house prices increased by 1.2% in the 12 months to February, compared to 2.9% in June 2025. In London, prices declined by 3.3% year-on-year as affordability pressures continued to weigh on the market.
Improving affordability supports buyer confidence
Affordability in London has improved in recent years, which may help support buyer activity over the longer term.
According to Nationwide, average house prices in London are now 8.8 times average earnings, down from a peak of 11.7 times in 2016. Although London remains significantly less affordable than the UK average, the reduction marks one of the largest regional improvements in England.
A continued shortage of new housing supply in the capital may also help underpin property values.
Adam Jennings, Head of Residential at Chestertons, comments:
“Buyer sentiment has been impacted more in London than in other parts of the country by uncertainty surrounding events in the Middle East. However, we are still seeing healthy levels of demand.
“For vendors, realistic pricing and presenting a property to the highest possible standard remain key to achieving strong interest from buyers.”