The London property market recovery is gaining ground, with estate agent Chestertons reporting its strongest run of buyer enquiries through its sales portal for 10 months. Sellers are returning too, and the rental side of its business is also picking up.
For investors weighing whether to buy, hold or trim exposure to the capital, the figures suggest the uncertainty that froze activity has started to lift, even if the regulatory backdrop for landlords has shifted markedly.
Sellers regain their nerve
Vendor instructions at the agency rose by 14 per cent year-on-year, a move Chestertons reads as a sign that owners are more willing to test the market.
August was busier still. New instructions jumped by 63.9 per cent that month, while sales agreed climbed 7.8 per cent on July.
Adam Jennings, head of residential at Chestertons, blamed the earlier slowdown on tax speculation. “Months of rumours about potential tax changes, many of them related to property, impacted activity levels in the housing market last year, particularly in the capital,” he said.
“After a challenging few months in London’s property market, greater clarity around the economic outlook is helping to support confidence among buyers and sellers.”
That chimes with the agency’s earlier view that London’s property market had hit its floor. Jennings added: “Combined with improving consumer sentiment and the renewed activity we are seeing across our London network, there are reasons to be optimistic about the market’s trajectory in the months ahead.”
Why a London property market recovery matters for landlords
More stock coming to market gives buyers, including portfolio investors, greater choice and potentially more room to negotiate. Rising sales agreed, however, indicate that competition for well-priced homes is building again.
The timing is awkward for anyone who sat out the downturn waiting for bargains. If momentum holds into the autumn, the window to buy at the bottom of the cycle may be narrowing.
Not every investor will be convinced. Higher costs and tighter rules have led some to question whether the capital is still a safe bet for residential investment, and a few months of stronger enquiries will not settle that debate on their own.
Tenants return, but take their time
On the lettings side, Chestertons recorded a 13 per cent year-on-year rise in enquiries from would-be tenants. New landlord instructions increased by around six per cent over the same comparison.
The recent path has been bumpy. Tenant enquiries fell year-on-year in each of the five months before the Renters’ Rights Act came into force in England on 1 May, then rose 17 per cent in May and 10 per cent in June before sliding to a seven per cent year-on-year fall in July.
Katinka Hill, head of lettings at Chestertons, expects demand to firm. “We expect this momentum to continue into September now that schools have returned and people are back from holiday,” she said.
“Achieved rental prices are holding firm, which is a positive sign. A notable trend we’ve seen since the Renters’ Rights Act took effect on 1 May is that tenants are taking longer to make decisions, weighing up their options more carefully. This is because they have increased flexibility to move, and there are plenty of quality homes to choose from.”
That shift in tenant behaviour sits alongside new obligations for landlords, from issuing the government’s Renters’ Rights Act information sheet to keeping better records, as lifecycle evidence becomes central to managing tenancies.
What this means for investors
For London landlords, the message is mixed but broadly encouraging: rents are holding, tenant interest is recovering and sellers are back. Yet tenants now have more flexibility and more choice, so voids could lengthen for properties that are poorly presented or overpriced.
Investors looking to expand in the capital should expect firmer competition on purchases if the autumn bounce continues, while those already holding stock will need to compete harder on quality to secure tenants who are in no rush to sign.
