{"id":27847,"date":"2025-12-24T05:34:35","date_gmt":"2025-12-24T05:34:35","guid":{"rendered":"https:\/\/www.benhams.com\/news\/?p=27847"},"modified":"2026-04-02T13:59:25","modified_gmt":"2026-04-02T12:59:25","slug":"uk-property-sales-hit-three-year-high","status":"publish","type":"post","link":"https:\/\/www.benhams.com\/news\/london-property-market\/uk-property-sales-hit-three-year-high\/","title":{"rendered":"Home sales in the UK are highest in three years at 1.2 million"},"content":{"rendered":"

The UK property market is all set to end 2025 on a high note, as Zoopla recorded a 9% annual growth in home sales<\/a>, with 1.2 million units sold this year. At a valuation of \u00a3367bn, this is the highest recorded sales figure since 2022. In other positive news for homebuyers and investors, the Bank of England (BoE) cut interest rates by another
25 basis points to 3.75%<\/a>. With the Autumn Statement clearing all doubts about rumoured property taxes, analysts expect the new year to usher in a wave of buying activity as property prices soar by 3% to 5% in 2026.<\/p>\n

\"London<\/p>\n

First-time buyers lead the way in 2025<\/h2>\n

Accounting for every two in five sales (39% of total sales), first-time buyers<\/a> were the largest buyer group across the UK, as better mortgage<\/a> availability since spring improved affordability. Existing homeowners with a mortgage were the second-largest buyer group (33%), accounting for one in every three sales, followed by cash investors (21%) and buy-to-let investors with a mortgage (7%).<\/p>\n

\"London<\/p>\n

London and Southern England buck the national trend<\/h2>\n

Although modest, house prices also increased by 1.1% in 2025, despite a slowdown in London and other southern regions, where affordability concerns driven by higher buying costs and unusually high supply levels dragged prices down marginally by 0.6%. Despite the recent drop, Rightmove’s latest house price index<\/a> reported average prices in the capital at \u00a3661,186, to be 85% higher than the national average of \u00a3358,138. Bargain-hunting buyers welcome price corrections in London and other southern regions, as the number of agreed sales has risen by 3% from the end of last year.<\/p>\n

No tax on 210,000 homes listed for sale<\/h2>\n

\"Property<\/p>\n

In her recent Autumn Statement<\/a>, Chancellor Rachel Reeves ended the speculation of a new property tax that would affect nearly 210,000 homes for sale<\/a> valued at \u00a3500,000 and more. Instead, there will be a new “Mansion Tax” that people with homes worth more than \u00a32 million will have to pay every year. This tax will only affect 0.5% of homes in the “high-value” category. Implemented in four bands, the lowest band is for homes worth between \u00a32m and \u00a32.5m, at \u00a32,500, with the highest rate charged for homes worth over \u00a35m, at \u00a37,500.<\/p>\n\n\n\n\n\n\n\n
Property Value<\/strong><\/th>\nAnnual Mansion Tax
\n(April 2028)<\/strong><\/th>\n<\/tr>\n
\u00a32m to \u00a32.5m<\/td>\n\u00a32,500<\/td>\n<\/tr>\n
\u00a32.5m to \u00a33.5m<\/td>\n\u00a33,500<\/td>\n<\/tr>\n
\u00a33.5m to \u00a35m<\/td>\n\u00a35,000<\/td>\n<\/tr>\n
Over \u00a35m<\/td>\n\u00a37,500<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

House prices expected to go up as affordability improves<\/h2>\n

Many analysts expect home prices to rise in 2026, even though the market was slow in 2025. This is because demand will rise due to reduced mortgage rates and clearer tax rules. Some forecasts predict that home prices will rise by as much as 4% over the next year.<\/p>\n

Our latest research also revealed that housing affordability will improve in 2026, as the house price-to-income ratio falls to 8.2. This marks the fourth consecutive year of improving affordability for homebuyers following a peak of 9.5 in 2022.<\/p>\n

London and Reading properties catch investor interest in India<\/h2>\n

Benham and Reeves India showcased a series of Berkeley developments across desirable areas in London and Reading. Joined by our MD, Anita Mehra, investors in Mumbai and Delhi gained valuable insights and detailed information about exciting developments, such as Reading Riverworks<\/a>, Oval Village<\/a>, White City Living<\/a>, South Quay Plaza<\/a> and The Green Quarter<\/a>.<\/p>\n

\"South
South Quay Plaza<\/figcaption><\/figure>\n

Successful launches in Malaysia and Singapore<\/h2>\n

Our Malaysia office recently hosted the exclusive launch of The Verdean<\/a>. Located just adjacent to Acton Main Line Station (Zone 3) on the Elizabeth Line, this brand-new development offers quick connectivity to central London, Heathrow Airport and Canary Wharf. Investors can expect attractive returns of up to 5.5% as rents in the area have surged by 28% over the last three years.<\/p>\n

In Singapore, our team showcased Lombard Square<\/a>, a new investment opportunity in Plumstead, offering rental yields of up to 6.2%. They also showcased The Row, a new luxury property development on Saadiyat Island, Abu Dhabi’s cultural district.<\/p>\n

\"Lombard
Lombard Square<\/figcaption><\/figure>\n

Tax on rental income to increase from April 2027<\/h2>\n

The Autumn Statement announced a hike in the income generated from rental properties. As per the revised rates, each tax band is increased by 2%. From April 2027<\/a>, the basic rate of rental income tax will be 22%, rising to 42% for higher-rate taxpayers and 47% for additional-rate taxpayers. When translated to actual costs, this increase could amount to an extra \u00a320 in tax for every \u00a31,000 of net rental profit.<\/p>\n

Rents in London rise amid the RRA implementation roadmap<\/h2>\n

ONS reported a 4.4% increase in average monthly private rents<\/a>, taking the national average to \u00a31,366. Although rents in the capital grew at a marginally slower rate of 2.8%, London’s average rent of \u00a32,271 is still over 66% higher compared to the rest of the UK.<\/p>\n

As per the Ministry of Housing’s guidelines, the first phase of the Renters’ Rights Act<\/a> will come into effect on 1 May 2026, impacting both new and existing tenancies. In addition to an end to Section 21 ‘no fault’ evictions, landlords and their letting agents will also need to adhere to many other reforms aimed at making the private rented sector (PRS) fairer to tenants and landlords.<\/p>\n

\"Tenancy<\/p>\n

A trusted lettings and property management<\/a> partner, Benham and Reeves, is well-positioned to support both local and overseas London landlords. Our 21 London branches, along with 13 international offices<\/a> and multiple country desks, offer a range of services<\/a>.<\/p>\n

Looking for an end-to-end property buying, selling and lettings journey in London? Contact us<\/a>.<\/p>\n