London Property Pulse

Chestertons London Property Market Review - Summer 2025

We are delighted to introduce our new seasonal Property Market Review, which we publish quarterly, with additional analysis published each month to ensure the information we provide is always up to date.

The detailed market review covers how the economy is performing, what’s happening politically, any legislation that might impact on the property market and looks at what’s happened in the past, what’s happening now and what is likely to happen in the next quarter.

Resilient Activity, Stable Prices & Key Buyer Opportunities:

Despite wider economic uncertainty and ongoing affordability pressures, London’s property market is showing strong underlying activity this summer. A combination of rising listings, steady transactions, and signs of stabilisation in both prices and rents point to a market that is resilient and offers good opportunities for well-prepared home movers.

1. Economic & Political Influences

The recent Bank of England base rate cut to 4.25% and early signs of falling mortgage rates—especially for high-deposit borrowers—have helped boost affordability in the Capital. Wage growth is outpacing inflation (5.2% vs 3.5%), improving affordability slightly despite stretched budgets.

2. Market Activity: Sales & Rise in the Number of Properties for Sale

According to TwentyEA, new property listings in May 2025 were up 6.5% year-on-year, and sales agreed rose 5.9%. While prices have softened slightly, particularly in Prime Central London, more mortgage rates below 4% have drawn buyers back into the market. As Chestertons' Head of Sales Matt Thompson notes, sellers who had delayed listing earlier in the year are now more confident and active.

3. London Rental Market

London rents rose by an average of £25 per month year-on-year, with letting activity strong but supply still constrained. While new lets were down 1.9%, the number of lets agreed rose by 10%. Chestertons' Lettings Director Adam Jennings highlights that demand is particularly strong heading into the student season, with rental growth expected over the summer—especially in high-demand zones such as Mayfair, Pimlico, and Islington.

4. Mortgage Outlook

Further interest rate cuts of 0.25% are expected before year-end, with Capital Economics forecasting a reduction in August. If mortgage rates continue to fall towards or below 4%, market activity is expected to rise further. This makes summer a potentially good time to buy, especially if demand picks up more sharply in the second half of the year.

5. Local Expert Forecasts

Chestertons' local offices forecast a mixed summer outlook, depending on property type and area:

• Studios and smaller flats may see static or falling prices due to oversupply and affordability constraints.

• Larger flats and family homes are expected to hold or gain value, especially in areas like Richmond and Barnes.

• Rents are forecast to rise, particularly for student-accommodating areas and in zones with ongoing supply shortages.

6. Advice for Buyers, Sellers, Landlords & Renters

• Buyers: Start viewing now—especially for flats—before competition potentially increases as rates fall.

• Sellers: Fairly priced homes are selling. Speak to an agent to understand the dynamics of your local property market.

• Landlords: Student demand over the summer offers a good opportunity to let but you do need to understand your legal obligations under the incoming Renters Rights Bill.

• Renters: Competition for properties is likely to increase, so it’s wise to secure properties early and ensure any property your rent is let legally and safely .
  

For a more detailed analysis and to explore all the insights from the Summer 2025 London Property Market Review, download the full report below.

We hope this review provides you with valuable insights into the current state of the London property market. If you have any questions or would like further details, please don’t hesitate to contact our team at Chestertons.