Early signs of renewed activity are emerging in London’s housing market as buyer demand begins to recover ahead of the spring selling season, according to the latest market review from estate agency Chestertons.
The firm’s February survey indicates a gradual improvement in sales activity following several months of subdued market conditions ahead of the Autumn Budget.
In February, the number of sales agreed rose by 30.9% compared with the previous month, while new instructions increased by 7.3% month-on-month, suggesting both buyers and sellers are beginning to re-engage with the market.
Portal enquiries were down 3.3% year-on-year, an improvement on the 6.3% decline recorded in January. Meanwhile, viewings, offers and exchanges – which typically lag online enquiries – also recorded smaller annual declines than in previous months.
IMPROVED AFFORDABILITY
Chestertons says the figures suggest market activity is stabilising as pent-up demand begins to return.
Affordability in the capital has also improved compared with recent years. Data from Nationwide shows that the average London home cost around 8.8 times average earnings in the fourth quarter of 2025, down from 11.1 times earnings in the second quarter of 2022.
Industry sentiment has also improved. The latest Royal Institution of Chartered Surveyors UK Residential Market Survey found more London agents now expect sales volumes to increase over the next three months than decline. In last month’s survey, 17% more agents anticipated rising sales, up from 12% in January.
MARKET REGAINING MOMENTUM
Adam Jennings (main picture), Head of Residential at Chestertons, says: “Improving affordability in London, along with the early signs of returning buyer activity, suggests that the market is gradually regaining momentum.
“Our data shows buyers and sellers are starting to re-engage and we expect this cautious optimism to support a steady strengthening of activity over the coming months.”
The lettings market also showed signs of stability. Tenancy renewals rose by 16.2% month-on-month, while new landlord instructions increased 2.8% year-on-year.
At the same time, the number of rental properties available declined by 5.4% year-on-year, keeping supply tight across the capital.
“London’s rental market continues to demonstrate resilience.”
Jennings adds: “London’s rental market continues to demonstrate resilience. The notable increase in tenancy renewals shows that many tenants are choosing to stay in their current homes, while the rise in new instructions highlights that landlords continue to recognise the strong long-term fundamentals of the capital’s lettings market.
“With supply remaining constrained across much of London, we expect rental values to stay well supported in the coming months.”
