Is London still the best UK market to invest in?

London has traditionally been the UK’s strongest market for buy-to-let investors – but is that still the case in 2026? The latest data and forecasts suggest that London is no longer the UK’s best investment market, and investors are better served by putting their money elsewhere.

We’ve gathered the latest information on London house prices, rents and future market forecasts to help investors make the most informed decision on where to buy UK property in 2026.

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House prices are falling in London in 2026

The peak of London’s housing market was extremely high, but it appears to be in the past. The latest data from the Office for National Statistics (ONS) shows the average London house price fell by 1.2% in 2025, following a 2.6% fall in 2024. That makes London the worst-performing region in the UK for house prices in the last year. 

Further research from Savills shows property values fell most sharply in Central London. On average, values in this market fell by 4.8% in 2025, with the value of the most expensive properties – those worth more than £10m – falling even further by a total of 5.6%.

This trend has been developing for a while. It is estimated that the average price in London increased just 16% between 2015 and 2025, compared to 44% in the rest of the UK. A mix of factors has contributed to this, including:

• Slowing demand has left a surplus of houses for sale in London
• Peak prices in London were so high that future growth is limited
• The high price of entry excludes many potential buyers from the market
• People are leaving London to live in other, more affordable places

It’s no wonder that in 2025, 14.8% of properties sold in London went for less than the original purchase price. 

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London rental growth is the slowest in the UK

Many of those same factors affect the growth of the rental market in London. Affordability and the high price peak mean a huge number of renters in London simply cannot pay more than they already do. The ONS data shows rent inflation in the capital was 2.1% in 2025, down from 2.8% in 2024.

Similarly, London’s annual rental inflation has slowed faster than anywhere else (-9.4%) since its 2024 annual peak (11.5%). However, the total average rent of £2,268 per month is still the highest in the UK, so it may appeal to investors on a pure numerical basis.

The only areas of London that can compete with the rest of the country are in the outer boroughs, according to the latest HomeLet Rental Index. However, there is a clear North-South divide when it comes to rental growth. Locations like Manchester and Liverpool city centres are growing much faster and represent a superior option for investors who want strong rental growth.

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Will London’s property market bounce back by 2030?

Property investment is a medium-to-long-term prospect, so what about the future? Savills anticipates that the London market will stabilise in 2026 and then return to modest growth for the next four years. By 2030, total property value growth in London is expected to be 13.6%, and rents are forecast to increase 11.5%. However, both of those are lower than the national average growth forecasts for house prices (22.2%) and rents (12%) over the same time period.

Other areas of the UK, such as the North West, are scheduled to see much higher growth in both categories, too. With that in mind, it is difficult to recommend London as a prime UK property investment market in 2026 or at any point in the foreseeable future.

Property works in cycles, and London appears to be in retreat for at least the next four years when compared to the UK’s fastest-growing markets. The peak was high, but it was not sustainable, and so we recommend that investors look to regional city hubs for their future purchases.

Want to learn more about the latest opportunities to buy UK property and maximise your returns? Contact our team of expert property advisors today to learn more!