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New year, new home? If you\u2019re looking to buy a new home in London in 2026, you might be wondering what to expect.<\/p>\n
Post-Budget, it might look like there are slim pickings out there. Uncertainty around the Budget caused house prices to fall across the capital, slowing down the market as buyers and sellers chose to hold off. <\/p>\n
And while the Budget didn\u2019t create the major overhaul that people feared, Christmas is not a popular time to sell.<\/p>\n
So, will the market ever pick back up? Is 2026 a good time to buy a new home in London?<\/p>\n
What to expect in January<\/strong><\/p>\n With the Budget and Christmas out of the way, it seems likely that things will pick up for buyers in the new year. We\u2019re talking a potential influx of new properties on the market, more stability and greater affordability, given that interest rates were cut to a three-year low last week<\/a>. All of which is good news for buyers.<\/p>\n \u201cI think there\u2019ll be a lot of choice because lots of people have been sitting on their hands, so to speak, waiting for the Budget. They haven\u2019t even gone onto the market,\u201d says Catherine Merrett at Harding Green. <\/p>\n \u201cWhat you want when you\u2019re moving house is as much choice as possible. You tend to get that in the spring market, which might come early this year\u2026I think we\u2019ll see a lot of activity.\u201d<\/p>\n \u201cOur view is often that the bigger the pause, the more substantial the rebound,\u201d agrees north London estate agent Jeremy Leaf. <\/p>\n \u201cThat said, we don\u2019t expect to see any great increase in house prices because there is still plenty of stock available in most price ranges and continuing underlying concerns about the strength of the economy generally.\u201d<\/p>\n The outlook for first-time buyers<\/p>\n For first-time buyers, 2026 could be a good time to get on the property ladder, experts say. <\/p>\n Not only are house prices likely to remain more stable, but borrowing costs are lower. \u201cHopefully that\u2019s to stay, but we don\u2019t know,\u201d says Merrett. \u201cGet [your mortgage rate] fixed.\u201d<\/p>\n \u201cHow those prices are going to rise long-term, I don\u2019t know, but that\u2019s where you\u2019re going to get good value,\u201d says Merrett. \u201cBut that\u2019s quite good for first-time buyers: you can get more space for your money in certain areas.\u201d<\/p>\n At the other end of the market, commentators believe that the introduction of Rachel Reeves\u2019 new Mansion Tax<\/a> on properties valued over \u00a32 million, which will come into effect in 2028, is likely to prompt sales from downsizers.<\/p>\n \u201cIf you can afford properties of those sorts of values, is that really going to stop you now? I don\u2019t think so,\u201d says Merrett. <\/p>\n \u201cYou might see more downsizers where people are property-rich, so they\u2019ve got all their money from the property. <\/p>\n \u201cThey might find that it does affect their month-to-month spending, so perhaps now is the time to downsize. You might see more properties coming on the market from that sort of seller.\u201d<\/p>\n Nina Harrison, buying agent at Haringtons, believes that downsizers might get good value from smart, new-build flats. \u201cWhatever the developers say, times are hard, and if you\u2019re standing there with a balance of cash, you will get a good deal.\u201d<\/p>\n Guy Meacock from Prime Purchase says that areas like Notting Hill with \u201ca strong following, a heart and soul, amenity and infrastructure\u201d remain popular<\/p>\n Matt Writtle<\/p>\n Unsurprisingly, properties in community-focused areas close to good primary schools remains as popular as ever. Or perhaps even more so, argues Guy Meacock, director of buying agency Prime Purchase.<\/p>\n \u201cWe are seeing ever greater value put on the importance of a decent high street and community, with quality of amenity and infrastructure, and we expect properties for sale in areas with these will be popular next year.<\/p>\n \u201cThere are also likely to be a lot of school-driven buyers; with London schools outperforming the rest of the country, those areas with good state schools will do well. We have seen a flight to quality with education as school fees have gone up.\u201d<\/p>\n This, says Meacock, drives the continued popularity of central London areas like Hampstead, Marylebone, Notting Hill, Kensington and Chelsea \u2013 or, further out, the likes of Highgate, Queens Park, Dulwich Village, Clapham, Wimbledon and Barnes.<\/p>\n Rather than living more centrally, Harrison says that post-Covid, younger clients prefer to commute into work from greener, more suburban areas like Balham or Tooting. <\/p>\n \u201cI think that will carry on,\u201d she says. \u201cI don\u2019t get the impression that the City is recovering.\u201d<\/p>\n Newer alternatives include areas like Colindale and Dollis Hill. \u201cIt\u2019s a great Edwardian suburb with huge gardens, and transport is very good,\u201d she says. \u201cDollis Hill is going up and up and up.\u201d<\/p>\n Merrett says the same of areas like Acton and Ealing, which offer more affordable alternatives to Chiswick. <\/p>\n \u201cIf you go a bit further out\u2026You\u2019re going to get more value for money. They still have very good transport links, and they are still very nice areas. It\u2019s just not as expensive.\u201d<\/p>\n Freehold houses, up to the value of around \u00a31.5 million, says Merrett, remain enduringly popular, especially with second steppers. <\/p>\n \u201cThey always carry on getting lots of interest, especially where they\u2019re near outstanding primary schools.\u201d <\/p>\n The government\u2019s leasehold reform bill has been delayed<\/p>\n Shutterstock \/ Frank 2012<\/p>\n In December, details of the government\u2019s Commonhold and Leasehold Reform Bill were pushed back to the new year, in what will come as a setback for the country\u2019s 4.8 million leaseholders \u2014 particularly those trying to sell up. <\/p>\n \u201cThere\u2019s definitely an anti-leasehold thing: people buy flats, but they want a freehold,\u201d says Harrison. <\/p>\n \u201cPeople want that sense of ownership \u2013 they didn\u2019t seem to mind before. I suppose it\u2019s a function of there being a lot more buyers from overseas.\u201d<\/p>\n![](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2026\/01\/London-houses-in-spring-bjlfioue.jpeg\")
<\/p>\n![\"London,uk,-,July,20,2018:,The,National,Leasehold,Campaign,Protest\"](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2026\/01\/London,uk,-,July,20,2018:,The,National,Leasehold,Campaign,Protest-neccsxds.jpeg\")
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