"The city continues to expand, international demand is returning and new housing supply still falls short of long-term requirements. Once confidence improves, this pent-up demand will be released"
- Matthew Thompson - Chestertons
Chestertons reports that London’s property market appears to have reached the bottom of its current cycle, with average prices across the capital holding broadly steady compared with last year. Although some higher-value central locations have seen softer conditions, this backdrop of stability and selective adjustments aligns with trends that typically occur just before buyer confidence begins to return.
The agency notes that several indicators point to resilience rather than weakness. “This is not a sign of weakness but of resilience,” explained Matthew Thompson, head of sales. “The market has weathered Brexit, a global pandemic, political uncertainty and rising interest rates. Although some areas, particularly in Prime Central London, have experienced modest price declines, many other postcodes have held firm. What we are seeing now is not a lack of demand but prospective buyers waiting for clarity following the Government’s Autumn Budget.”
Chestertons’ latest findings highlight conditions that have historically emerged at the bottom of a cycle. Buyer enquiries, viewings and offers have slowed, while listings have increased. According to the agency, this shift does not signal a declining market but reflects temporary caution until greater economic certainty emerges. Previous cycles have shown that similar pauses were often followed by notable rises in activity once confidence returned. As a result, committed buyers may find greater choice and reduced competition during this period.
Thompson added: “London’s fundamentals remain exceptionally strong. The city continues to expand, international demand is returning and new housing supply still falls short of long-term requirements. Once confidence improves, this pent-up demand will be released.”
The company believes that a turning point is drawing nearer, supported by stabilising inflation, improving lending conditions and the upcoming details of the Autumn Budget. “We believe the market has now found its floor and that 2025 will lay the foundations for a more active 2026. For buyers, this is one of the most attractive entry points London has offered in a decade. Those who recognise that London rarely stays quiet for long will be best positioned to benefit from the next cycle.”
Overall, the agency indicates that the market’s underlying strengths remain intact, and the current pause may represent an early stage of recovery rather than a further downturn. Factors such as improving sentiment, increasing clarity around fiscal policy and gradually shifting lending conditions could help unlock demand as the next cycle forms.
