Previewing 2027
Throughout 2026, the overall picture for London home buyers has changed little. We don’t foresee major changes in the coming year (unknown unknowns aside!) but will be monitoring the following:
- Will Labour legislate meaningful reform of the leasehold system or struggle to make tangible progress?
- Will the proposed ‘high-value council tax surcharge’ or ‘mansion tax’ still be implemented in April 2028? Tax Policy Associates identified price ‘bunching’ is already occurring just below the £2m threshold. Elsewhere, there is talk that the cost of implementing and managing the valuation process may not be cost effective.
- Will the house price gap between inner London and the rest of the UK continue to narrow? Savills’ latest market forecast thinks so.
A good Budget for London?
Centre for Cities has previously argued that “London has [the] weakest tax powers of any G7 city” but could this be changing?
A relatively uneventful Autumn Budget has been welcomed by mayor Sadiq Khan as a “really positive and significant day for London”.
City Hall claims increased fiscal devolution could help bring cross-channel services to Stratford and fund a long-awaited extension of the Bakerloo line. It may also accelerate the Euston Knowledge Quarter Masterplan, further transforming the Euston/King’s Cross area.
We wouldn’t go as far as saying this bodes well for London house prices but improved infrastructure and the ability to retain more of the money it generates can only be a good thing.
London flats – Beyond the headlines
A recent BBC report on ‘Why are London flats harder to sell’ highlighted the greater proportion of flats relative to houses that remain unsold after 6 months.
Source: BBC News
However away from the headline statistics, the reality is far more nuanced. A leasehold flat in a second-hand new build with service charges outpacing inflation and no unique features is performing very differently to a Share of Freehold in a well-managed Victorian conversion. The latter, if priced in line with comparable sold data, typically attracts a buyer in the first month of marketing.
Throughout 2026 we have still had to manage competitive bids on some of the best period flats and have seen price records set on certain streets. It’s important buyers don’t rely on broader market trends.
The Square Mile’s Ascent
1 London is set to rival The Shard as London and Western Europe’s tallest skyscraper. Due to begin construction in 2028, it signals the ongoing confidence in The City of London where you are never far from a crane. Ten years on from Brexit and there is still no European financial hub which can rival the area.
We have previously commented on how the Square Mile’s burgeoning commercial property market stands in contrast to the relatively muted residential sector in the same area and City fringe neighbourhoods (Clerkenwell, Shoreditch, Aldgate). There is an argument that such areas represent good value relative to other central neighbourhoods which are not on the doorstep of so much transformative development.
Navigating London’s landlord exodus
We are reviewing an increasing number of properties being sold by landlords. October’s Budget announcement of a 4-percentage-point increase in the tax rate paid by landlords from April 2027 will only exacerbate this trend.
Under the Renters’ Rights Act, selling landlords are required to give tenants a minimum of 4 months notice. However the majority of landlords marketing their property for sale have not served this notice – perhaps as they are not anticipating a quick sale.
For patient buyers, this additional waiting time and uncertainty can provide extra negotiation leverage but it’s vital any offer specifies the exact terms for notice being served and the paperwork is reviewed by solicitors early in the process.
