London property market: Q1 2025 in review

The first quarter of 2025 brought a long-awaited sense of calm to London’s property market. After two years of volatility, transactions, prices and rents all moved in the same direction — and that direction was, mostly, up.

Prices stabilise after the post-mini-budget wobble

Average prices across Greater London rose 1.8% year-on-year, with inner-London flats leading the way. The biggest gains were in:

Area	YoY change	Avg price
Hackney	+4.2%	£612k
Wandsworth	+3.6%	£698k
Camden	+2.9%	£847k
Greenwich	+2.1%	£485k

Outer London boroughs and commuter towns saw more modest growth, but the worst of the post-2022 corrections are firmly behind us.

Mortgage rates continue to ease

The Bank of England’s base rate held at 4.5% through Q1, and lenders responded with the most competitive fixed-rate deals in 18 months. A two-year fix at 60% LTV is now available at 4.19%, and five-year fixes have dipped below 4.5% for the first time since 2022.

For a £500k mortgage, that’s a monthly saving of around £140 versus the same deal a year ago.

Rental yields quietly improve

Rents rose 6.4% across the capital, outpacing house-price growth for the fifth consecutive quarter. Average gross yields on a typical buy-to-let now sit at:

• Studios: 5.8%
• One-beds: 5.3%
• Two-beds: 4.9%
• Family homes: 4.1%

“Landlords who held on through the difficult 2022–2023 period are now reaping the rewards. The market has rewarded patience.” — Andrew Smith, Jagaan Research

What to watch in Q2

Three things will shape the next quarter:

1. The next base-rate decision — any cut would unlock a fresh wave of buyers
2. Spring stock levels — listings are up 12% YoY, giving buyers more choice
3. The end of the EPC C deadline — could push some rental stock off the market

The bottom line

For owner-occupiers, the market is the most balanced it’s been in years. For investors, yields are healthy and the regulatory environment is finally stable.

If you’ve been waiting for the right moment, the data suggests that moment is now.