London stays resilient despite an unusual UK price drop

Rightmove reported a 0.6% fall in the average price of properties coming to market in June 2026. This is the largest June price drop in the last 14 years, as sellers look to catch buyer attention amid an unusual heatwave and the ongoing FIFA World Cup. However, despite this nationwide drop, prices in the capital remained resilient, rising 0.3% YoY.

Key highlights from June 2026

• Average new seller prices across the UK dropped by 0.6%
• Prices in London are up by 0.3%, with the highest monthly growth in Kensington & Chelsea at 2%
• The two-year average fixed mortgage rate drops to 5.07% from 5.18%
• The Bank of England (BoE) holds the interest rate at 3.75%
• Average rent in London increases by 2%.

Price corrections fuel buyer demand in London

Buyers have been attracted by the recent wave of price corrections across the capital, as it now takes 68 days to secure a buyer in London, compared with 89 days at the start of the year. In addition to its market resilience, London is also far ahead in terms of price valuesing, with the average property costing £687,080. This is nearly 83% more than the national average of £376,191.

Kensington & Chelsea lead London price growth

The most premium Borough in the capital is also the one leading the price growth charts. The average property price in Kensington & Chelsea increased by 2% in June to cross £1.7m. This was followed by a monthly growth of 1.4% in the Boroughs of Brent and Barnet, followed by a 1.2% increase in Haringey and Hackney.

Market activity is consistent with previous years, despite a minor dip

The heatwave in May caused a slight fall in buyer demand, as home-movers looked to wait out the rise in mercury levels. Despite the number of newly listed homes coming to market being down 5% YoY, it is still 6% higher than in 2024 and 12% higher than in 2023. Overall, agreed sales were also level with 2024 and 5% higher than 2023.

Mortgage rates ease as inflation holds steady

Mortgage affordability improved as Rightmove reported a slight drop in the average two-year fixed rate to 5.07% from 5.18%, resulting in an average monthly savings of up to £30. In an attempt to keep inflation low and stable, the Bank of England (BoE) held its base rate at 3.75% as inflation remained unchanged at 2.8%.

International property showcases, launches and private consultations

June was a busy month for our overseas offices as they wrapped up several successful property exhibitions and new-phase launches and held private sessions with investors. While our teams in Hong Kong and Singapore hosted the launch of the new phase of London Square Bermondsey, our offices in India held private investor consultations for new homes in Wimbledon. Our office in Indonesia showcased Berkeley Group’s London collection in Jakarta.

Next up, our Hong Kong office is all set to host exhibitions for Royal Arsenal Riverside and Kidbrooke Village. Meanwhile, our offices in India will host events in Hyderabad and Bangalore to present Oval Village and The Exchange Watford this July. Our Singapore and Japan offices will also host a lettings and property management clinic and seminar for investors.

Rental growth is slow but steady

The Office for National Statistics (ONS) reported a growth of 3.3% in average monthly rents across the UK for the 12 months to May 2026. This was slightly below the 3.5% growth recorded in the previous month. Rental growth in London remained unchanged at 2% from the previous month; however, average rent in the capital is still the highest at £2,294, which is more than 66% the national average of £1,383.

London is experiencing the highest rental demand

According to Zoopla’s recent rental market report, London is the only region in the UK experiencing a high rental demand of 6%. This is largely driven by higher mortgage rates and a limited supply, which is nearly 25% below pre-pandemic levels. With the average earnings growing at twice the rate of rental inflation, affordability has been improving for three consecutive years.

Full compliance and personalised lettings strategy with Benham and Reeves

With the Renters’ Rights Act coming into effect last month, UK landlords now need to adjust and adapt to several new regulations. Our team of professional lettings experts ensures full compliance with all the new rules while also helping landlords maximise their rental income. We have 21 branches across London and several international offices, providing a one-stop property buying, lettings and management service to overseas homebuyers, landlords and investors.

If you are an investor looking to buy or rent a property in London, contact us to know more.