Debunking the myths surrounding London property

From prices crashing to landlords leaving, bad timing, and the rental market weakening, there are quite a few myths surrounding the London property market. In this blog, we look at some common myths and the reality that actually shapes the UK capital’s dynamic property market.

As a landlord, investor or homebuyer considering a property move in the UK capital, negative or hostile headlines about the London property market are rife. Reports that prices are going down, landlords are leaving the market, and demand is drying up can make people less likely to follow through with their plans.

These headlines and reports may not tell the whole story, since the property market in the capital is complex and layered. Prices do move through cycles of adjustment and are closely tied to factors such as changes in supply, interest rates, and other regulatory pressures. However, the city’s fundamentals are sound.

Beyond the headlines, London’s property market remains far more resilient and opportunity-driven than the narrative suggests.

Let’s take a look at some of the most common myths surrounding London properties and debunk them one at a time.

Myth 1: London house prices are crashing

Correction vs crash : why the distinction matters

There’s a clear difference between price corrections and crashes. While London did experience prices softening last year due to supply being at a decade-high level, prompting sellers to price more competitively, the total drop from May to August still did not exceed 2.5%. Prices also gradually rebounded after the fall, indicating a cyclical trend.

Area-led performance in regeneration zones

Several well-connected areas, which are also regeneration hotspots like Nine Elms, Paddington, Colindale, Woolwich and Southall, consistently experience price growth. Hampstead is also considered an evergreen and resilient property market, where our local branch achieved several successful sales last year.

Long-term market resilience

Looking at price growth over a longer period and comparing the data is crucial to getting a better understanding of the overall market performance. According to Land Registry data, average property prices in London have increased by
over 81% in the last 15 years
.

While property prices go through cycles of cooling, recalibration, and then steady growth, smart buyers who identify opportunities at the right time and in the right areas are often successful.

Find out some of the key trends for London property investors in 2026.

Takeaway: Market adjustments are creating entry points, not signalling long-term decline.

Myth 2: Landlords are leaving London in droves

Reality

An evolving landlord landscape

The landlord base in London is continuously evolving. While it is true that some smaller landlords may have exited owing to higher borrowing costs and tightening regulations, their assets have been purchased by institutional, corporate or overseas landlords with better access to capital. Further restructuring by portfolio landlords has, in fact, improved efficiency in the lettings space.

Supply shortage strengthens demand

According to Rightmove’s last rental trends tracker, despite a 9% annual improvement in rental supply last year, the number of available homes to let was still 33% lower than a decade ago. This gap between demand and supply makes the London rental market very attractive to buy-to-let (BTL) and portfolio landlords.

For resilient landlords who stay patient and adapt to the market changes, less competition combined with strong demand helps them benefit when rents increase.

Takeaway: Reduced supply is strengthening the position of well-capitalised landlords.

Myth 3: It’s a bad time to buy because interest rates are high

Reality

Stabilising interest rates

After hitting a 15-year peak of 5.25% in 2023, interest rates gradually stabilised to 3.75% at the end of 2025. With further cuts by the Bank of England (BoE) expected to bring down the base rate to 3.25%further in 2026, buyers and investors will find borrowing more affordable in a stable property market.

More negotiation power

With high supply levels, buyers currently have more choice, enabling them to negotiate more effectively with sellers. Buyers can also negotiate with lenders, as there are more mortgage products available than a year ago due to increased competition.

Higher rental income

According to the Office for National Statistics’ latest findings, the average rent in London at £2,271 is more than 66% the UK’s average of £1,366. Stronger rents in the capital also help landlords offset borrowing costs more effectively than in other UK regions.

For investors and buyers evaluating the best time to buy, data suggests the right time is usually before market confidence returns.

Takeaway: The best buying windows often appear before confidence returns.

Myth 4: The London rental market is weak

Reality

Demand that outstrips supply

Nearly 45,000 London properties were sold between 2021 and 2023, and many of those have yet to be replaced by new housing stock, leading to a 41% reduction in the number of properties available to rent since the Covid-19 pandemic.

Strong tenant demand

While supply has been hit hard, rental demand in the capital remains high, driven largely by international students and working professionals relocating to London. Affordability constraints have also led many first-time buyers to delay purchases and continue renting.

Here’s why London is considered a top destination for international students and professional tenants.

Low void periods

Correctly priced rentals that meet tenant expectations, such as safety and professional management, experience shorter void periods and higher rental yields.

Takeaway: London continues to be one of Europe’s strongest rental markets driven by ever-increasing demand and a shortage in rental stock.

Myth 5: London is no longer a global property hotspot

Reality

A global city with strong fundamentals

Despite the cyclic rise and fall in its property prices, many overseas buyers still see London as a golden opportunity. Consistent value growth, combined with the UK’s stable political, legal and economic landscape, boosts investor confidence in the long run.

Overseas demand drives growth

London is still seen as a global financial, academic and cultural hub with thousands of students and working professionals relocating to the city each year. The UK’s favourable time zone further enables smooth trade and commerce with Asian and American companies.

Takeaway: While buyer sentiment may fluctuate with current market conditions, long-term investors recognise the growth potential and sound fundamentals of London property investment.

Conclusion: Uncertainty creates opportunity

Despite the myths and uncertainty surrounding it, is London property still a good investment? The answer is yes. Periods of doubt and scepticism do not weaken the property market; rather, they separate informed decisions from emotional ones. In a dynamic property market like London, investment outcomes largely depend on ‘where you buy’, ‘why you buy’ and ‘how the investment is structured’.

Working with an experienced property partner with a 65-year London legacy, like Benham and Reeves, is helpful for identifying growth opportunities in emerging areas and rental market trends. Our 21 London branches, combined with 13 international offices, help clients look beyond the negative headlines and find the right opportunity that matches their goals and builds their portfolio.

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