London property in 2026: who's actually still making money.

I have been selling London property since 2006. I have watched this market get declared dead roughly once every three years, and I have watched a great many people quietly get paid throughout every one of those funerals.

So let me say the honest part first, because I am not interested in writing a brochure. The country has real problems. Growth is weak, the tax position keeps moving, and confidence is thin. Anyone telling you London property is booming is selling you something.

But "the country has problems" and "there is no money in this market" are two completely different statements, and people keep collapsing them into one. The second one is simply not true, and I can show you where it stops being true.

Start with the bad news, properly

No softening. Here is what the prime London numbers actually say as of the most recent full data:

That is not a soft patch. A third of the transaction volume disappeared in a single year, and prime central London has now spent a decade going backwards in nominal terms — before you even account for inflation, which makes the real number considerably worse.

The cause is not mysterious, and it is mostly not economic. It is tax uncertainty. The non-dom regime went, and then the market spent the following period waiting to find out what would happen to property taxation at the Budget. Stamp duty was ultimately left alone, but the High Value Council Tax Surcharge — everyone calls it the mansion tax — arrives in April 2028 on homes above £2m, charged between £2,500 and £7,500 a year depending on band, and assessed on 2026 valuations.

Read that last part again, because it matters more than people realise: the valuations that set that bill are being formed now.

Now look at what the completion figures hide

Here is the part that almost never makes the headline, and it is the single most important thing in this article.

Completions are a rear-view mirror. A sale completing in Q1 was agreed months earlier, in the depth of the uncertainty. If you want to know what the market is doing now, you look at what is under offer.

• Properties under offer in Q1 2026 were up 7.6% year-on-year — while completions were down 32.6%.
• That under-offer figure sat roughly 35% above the long-term pre-pandemic average.
• Q2 completions then came in around 10% ahead of the same quarter a year before.
• In lettings, instructions rose 40.8% and agreed lets 32.4% year-on-year.

So the picture is a market that froze at the point of maximum tax uncertainty, and then started moving again underneath a headline number that was still reporting the freeze. By the time the press caught up to "transactions down a third," the pipeline had already turned.

I have seen this specific pattern three times in twenty years. The people who made money were the ones reading the pipeline, not the press.

Where the money actually is now

Four places. None of them are "buy in Kensington and wait for it to double," which is the strategy people still have in their heads and which has not worked for a decade.

1. Income, not growth. This is the big one. Rents are more than 30% above pre-pandemic levels. Capital values have fallen. Those two facts together have pushed average prime London yields to about 4.96%, against roughly 3.5% through 2013–2020. For anyone buying for income rather than appreciation, London is materially better value than it has been in over a decade. That is not a spin — it is arithmetic.
2. Buying the discount. Average discounts to asking price are running at 10.5% across prime London and 14.2% in prime central. Combine a 14% discount with values already 15% below their decade-ago level and cash buyers are transacting at a level the last ten years of sellers would not recognise. The £5m+ market is where this is sharpest: volumes down 27.8% year-on-year, yet still 3.7% ahead of the longer-term average. Thin, but functioning — and negotiable.
3. Volume, for anyone paid per transaction. This is your point, and it is the one people miss entirely. Every completion pays a long chain: agent, mortgage broker, lender, conveyancer, surveyor, search provider, removals, trades, refurb contractors, furniture and white goods, and the Treasury via stamp duty. Lettings adds a second and steadier layer — letting agents, property managers, maintenance contractors, inventory clerks, gas and electrical safety engineers. A flat market with healthy volume pays far more people than a rising market with no deals.
4. Fixing what nobody else will. A market with high stock and long selling times is a market where condition decides outcomes. Refurbishment, compliance, maintenance and turnaround work all become worth more when a buyer has thirteen percent more choice than last year. This is a large part of why I built FixMyProperty.ai — the maintenance layer stays busy in exactly the conditions that make the sales layer difficult.

What is genuinely broken, and I won't pretend otherwise

Three things, and none of them are small.

Financing is still expensive. Base rate is 3.75%. Average two- and five-year fixes sit near 5.6%, though best-buy rates at sensible loan-to-value are more like 4.3–4.6%. Anyone modelling a leveraged purchase on 2021 assumptions is going to be disappointed. The yield story above is significantly better for cash than for debt, and I would rather say that plainly than let someone find out with their own money.

The mansion tax is a real drag on the top end. Not because £2,500 to £7,500 a year is unaffordable for someone in a £2m-plus home, but because an annual, politically visible, index-linked charge changes how that asset is perceived. It converts a store of value into a thing with a running cost and a headline attached. Expect continued softness just above the £2m threshold, and expect valuation disputes around it.

And confidence has not returned. Stock is up 13.8%. Discounts are in double digits. Sellers who need to move are competing with a lot of choice, and the buyer knows it. If you are selling into this market on a timeline, you will feel it.

What I would actually do

If you are buying for income: this is the best relative entry point London has offered in over ten years. Buy on yield, not on a story about future growth. Underwrite it at today's rate, not a hoped-for one.

If you are selling: price to the market that exists, not the one you bought into. With stock up double digits, the property that sells is the one that is priced and presented for the buyer's reality. Chasing the market down costs more than pricing correctly at the start — every single time.

If you are around £2m: understand that 2026 valuations set your 2028 liability. That cuts both ways, and it is worth advice rather than guesswork.

If you work in the industry: this is the market that separates people. Volume is thinner, so skill matters more, and the agents who build a real client base in a hard market own it in the next good one. I have written about why a quiet market is the best time to become a great agent, and I believe that more now than when I wrote it.

London has not stopped working. It has stopped being easy — and easy was always the anomaly, not the rule.