Very modest optimism about housing in 2026

London property recap: 10 January 2026

Happy new year! My girlfriend is partying with her family in the tropics this week, so rather than sulk inside, hiding from the rain, snow, and Storm Goretti, I thought I’d take the chance to sulk inside and write up a (for now sporadic) Propegator post instead.

After all, there’s a lot going on with the property market. Not so much on the ground, where the Christmas period snuffed out any hint of what could be termed enthusiasm in London. But at least in the share prices of home builders over the past few weeks:

Is this simply a dead cat bounce after a moribund 2026?

Perhaps not only that.

For one thing interest rates – and more importantly mortgage rates – have come down. While the home builders would really love to see the return of Help to Buy, anything that helps with affordability should support demand – and profit margins.

I suspect investors are also responding to the planning changes announced around the time of November’s Budget, such as a (supposedly) default ‘yes’ to proposals for new homes near trains stations and the further overhaul of the National Planning Policy Framework announced in mid-December.

Berkeley Group for one has never seen a train track in London that it didn’t want to build an urban village next to. More broadly, the government reckons a further planning revamp could unlock 1.8m new homes.

True, these are the same guys who said we’d see 1.5m new homes built during this Parliament but who for now have presided over a pandemic-level collapse in activity.

They’ve earned our scepticism!

Then again, when homebuilding is this deep into the dumpster – particularly in London – the only way is up.

House price forecasts for 2026

What I don’t think the market is reflecting is any imminent property boom. At least not judging by the experts’ predictions for house price growth in 2026:

• Nationwide is relatively optimistic, but it’s still only looking for 2-4% growth nationally and 3% in London

• Rightmove expects just 1% house price inflation in London and 2% nationally

• Savills downgraded its national forecast to 2% for 2026

• Halifax expects modest house price growth nationally of 1-3%

Something to keep a particular eye on will be the performance of homes around the £2m mark, most of which are of course in London. That’s where the new Mansion Tax kicks in from 2028, as announced by Rachel Reeves in her November budget.

Even if your sights are set far lower than a cool two milly, it should be – ahem –fun to watch how this latest arbitrary distortion to the tax code warps prices and activity.

• While new housing starts basically dried up in London during 2025, the volume builders did have a few ongoing projects they were still finishing up – such as Berkeley’s vast Alexandra Gate development in North-East London. Set within sight of the famous Alexandra Palace, you have the yummy mummy enclaves of Muswell Hill and Crouch End within striking distance, and gentrifying Harringay to the south too. The site itself though is in still-scruffy Wood Green. But at least this puts you nearer a tube (and, of course, those railroad tracks!) Berkeley’s own website is serving me with loads of errors when I click around it. But Foxton’s just listed this 833 sq ft two-bedder at Alexandra Gate for £665,000 on Rightmove.

The links

Shortcuts for the discerning property fanatic.

News

2025 house price winners and losers – Which

Prices of flats fall again as landlords sell and buyers seek houses – Landlord Today

What 2026 could hold for the UK housing market? – The Conversation

What will happen to London house prices? – Standard

70,000 homeowners face a big jump in mortgage payments this month – This Is Money

UK housebuilding sinks to deepest slump since Covid lockdowns – Business Matters

Chef, theatre designer, and football chief to advise on Oxford Street plans - Standard

London councillors sound alarm over £372m cost of Freedom Pass – Standard

TFL signs Otis to keep the tube’s escalators moving until the 2040s - Ian Visits

Where next for mortgage rates? – This Is Money

Mortgages, moving, and other money matters

Three major banks slash mortgage rates in boost for borrowers – This Is Money

Will 2026 be a good year to buy or sell a home? – Standard

“Cold means I can’t live in my new build in winter” – BBC

How the non-dom exit is reshaping the super-prime market ahead of 2026 – Spears

The investing angle

Properties flipped falls to lowest level since 2013 on stamp duty costs - This Is Money

Landlords spend up to 45% of rental income on rising costs – Property 118

“My investment property is still down after 19 years…” – This Is Money

Yet another London council clamps down on landlords – The Negotiator

Small landlords will be forced out by new regulations, warns expert – Property 118

Find more investing and money insights at our sister site Monevator

Good bones

A modern Clapham house nestled indulgently in its garden – Wallpaper

IKEA debuts colour-shifting version of viral ‘doughnut lamps’ at CES - Dezeen

These downsizers found the cottage of their dreams – Ideal Home

Eight kitchens filled with natural wood – Dezeen

A former brewery store in Chiswick turned into a generous home – House & Garden

Why smaller houses can lead to happier lives - WSJ via MSN

Your great outdoors

How to make your garden easier to manage this year – The Middle-Sized Garden

The plants everyone will want in their gardens in 2026 – House and Garden

Property picks, home…

Richmond continues to top those surveys of the best places to live, but that hasn’t helped this quirky two-bed maisonette find a buyer since late 2024. And that’s with the price down from £600,000 to £475,000, too. True, its excellent Richmond Hill location is offset by the fact it’s above shops and the rooms are higgledy-piggledy. But this is London, and it still seems a keen price for 700 sq ft of potential. There’s even a new long lease. I presume there’s a catch but I can’t see it on a quick review (damp?) The flat is now to be sold via auction, with a deadline of 30 January – Rightmove

Marylebone has blossomed over the past 25 years, thanks in large part to enlightened curation and management from the Howard de Walden family, which owns the freeholds of most of it. Luxborough Tower sits on its northern frontier, and while nobody thinks of high rises when pondering W1’s charms it is a bit of a modernist beauty. The asking price of £695,000 isn’t bad for the area – nor is the £3,200 service charge – although you do only get 528 sq ft for your money and the bonus balcony is a narrow one. Nice clean interiors – The Modern House

So far it seems my ‘brave’ call that London prime property could be a canny buy was premature. Prices in formerly beloved areas such as Kensington and Chelsea continue to march down, as non-doms leave and wealthy natives hold back on the relative bargains. (Prices here are down over more than a decade!) Interestingly, the slump has shown up a lot of million-pound-plus flats as being very so-so – at least when there’s no agent convincing you it’ll be sold by tomorrow. But this 926 sq ft two-bedder in Chelsea distinguishes itself with high ceilings, a terrace, two bathrooms, and a price down by £200,000 to £1.4m. Note the service charge is a hefty £5,951 – John Wood

…and away

Could the builder of Ginmill Barn in the 17th Century have imagined an urbanite drooling over its lifestyle potential in 2026? No more than they could envisage an iPhone. Everything that makes this a beauty – the wooden beams, the stonework walls that look like the flinty faces of cliffs, the red-tiled roof – were expedients of the era, not a bougie handcrafted fit-out to win acclaim on Instagram. You get over 4,000 sq ft for just £625,000. The downside? I had to lookup Roxby on Google Maps, where I discovered it’s a four-hour drive to London and the nearest town is Scunthorpe – Inigo

Click over to view this seven-bedroom Arts and Craft mini-mansion in Broadstairs and for all its beauty I guarantee the wider exterior shots will grab your attention. Yes, this house is perched near the edge of a bloody great cliff. A bit disconcerting given that barely a week goes by without the climate crisis sending another all-too-beside-the-seaside home over the edge somewhere. The agent says the cliff is protected from erosion by concrete defences, and you can see them in a photo. But then estate agents also say things like ‘very well-connected’ about tubeless Stoke Newington. Note: I’m no geologist and I have absolutely no idea if this home is vulnerable. If you’re confident – or you’re over 60 and have no heirs – then it could be a stunning place to live out your days. Provided you can find £1.85m, at least – Winkworth

Out of house

The 26 best things to do in London in 2026 – Time Out

Poems on the Underground marks 40th anniversary – BBC

40 of London’s magnificent hidden gems – Standard

London local news website publishes misleading ‘AI-generated fiction’ – Press Gazette

Wild swimming spot in Hackney could host 1,200 bathers a day – My London