Chestertons Sales and Lettings Report - Q4 2025

The London property market is entering 2026 with improved clarity and growing confidence. Property taxation changes announced in November’s Autumn Budget, alongside the Bank of England’s decision to reduce the Base Rate to 3.75% in December, have helped stabilise market sentiment. While neither development is expected to significantly alter market dynamics, together they provide greater certainty, supporting steady activity and low single-digit price growth across both sales and lettings.

In the sales market, buyer confidence has improved following a period of hesitation in the second half of 2025. With greater clarity provided by the Budget and limited changes to property taxation, Chestertons has seen increased enquiries and viewing levels, as purchasers who delayed decisions begin to re-engage. Although housing supply remains constrained across London, early signs suggest a gradual easing, giving buyers slightly more choice and improved negotiating power. Transaction levels are expected to strengthen in the early months of 2026, with modest price growth anticipated as demand stabilises.

Prime Central London is expected to see modest growth as the market continues to stabilise. Strong long-term fundamentals, including a persistent supply-demand imbalance, sustained international demand from global buyers, and London’s continued appeal as a secure investment destination, continue to underpin activity in this sector.

In the rental market, inflation picked up towards the end of 2025 but is expected to stabilise during 2026. The introduction of the Renters’ Rights Act from 1 May 2026 will bring greater clarity and security for tenants, while supporting a more balanced rental market overall. While the legislation will restrict most landlords from accepting offers above the asking price, which may lead to slight increases in advertised rents, its overall financial impact on landlords is expected to remain limited, helping to prevent extreme rent increases.

Read the full Chestertons Q4 2025 Sales and Lettings Report