Is now a good time to buy property in London? What should investors consider?

Buying a London property is often regarded as one of the most sound investment decisions. Whether it is growing rental yields or long-term price appreciation, investors and buyers from all over the world invest in the UK capital. The city’s cosmopolitan appeal, educational institutions, stable political environment and range of properties on offer make it a hotspot for and investment.

However, timing does play an important role as market conditions impact pricing, demand and other factors to consider when planning an investment. Let’s look at some points to analyse whether London property is a good investment now.

Price drops spur buying activity

As in any investment ecosystem, the best time to buy is when prices are undergoing a correction and the market is down. Whether it is property or the stock market, savvy investors usually wait for prices to drop as the right moment to secure a good deal. According to Rightmove, month-on-month price drops this summer have caused average property prices in London to fall by almost 5% from £702,000 to £667,000. Therefore, it is no surprise that buying activity is 8% higher than this time last year.

Benefits of a buyer’s market

Availability of housing stock is another key factor when predicting house prices, as London usually sees higher demand than supply. However, this summer, things are different as there are 10% more homes for sale than last year. This means that sellers will have to work harder to find buyers, which is good news for serious buyers, looking to make deals before prices go up again. Rightmove also reported that 34% of homes have lowered their asking price, which is the biggest drop since 2012, except for 2023.

Lower mortgage rates boost buyer morale

The Bank of England (BoE) slashed its base rate to 4% in August 2025, bringing down the cost of borrowing for homebuyers looking to make a move when interest rates are at their lowest since the Autumn of 2023.

Predictions for the rest of 2025

Although many economists and financial experts are predicting a further rate cut this year, there is no guarantee that the BoE will cut rates further as the US continues to impose higher tariffs on UK steel and other imported goods. Also, house prices are expected to increase between 2% and 4% in 2025, so waiting longer could mean prices rebound in the Autumn and Winter after the Summer drop. With more mortgage options available than before, buying a property now makes sense before prices rise once again.

Where to buy a London property in 2025?

Location is very important when it comes to timing your purchase because it affects both the amount you can spend and the potential growth and return of your investment. Earlier this year, we published research that compared property prices in all of London’s Boroughs. The gap between the average price in the cheapest borough, Barking and Dagenham (£363,323), and the most expensive borough, Kensington and Chelsea (£1,183,172), was an incredible £819,849.

While the pricing difference shows the vast diversity in London’s property markets, it is also important to note that rental yields differ widely across the city. To help you choose the best areas to buy, here’s a list of the top up-and-coming areas to buy a London property in 2025.

Why buy with Benham and Reeves?

Benham and Reeves is one of London’s most trusted estate and lettings agents, with over 65 years of industry experience. We have helped thousands of property buyers find the right London home. We have 21 branches across the UK capital with local property experts to help you with every step of your investment journey.

Whether it is navigating the complexities as a first-time buyer or maximising returns by diversifying your property portfolio, we have the right expertise and resources to guide overseas property investors towards successful ventures. Contact us today to explore new opportunities in London.