Falling asking prices and volatile mortgage rates: is now the time to expand your London portfolio

11/08/2026

London’s housing market is giving buyers more negotiating room, but borrowing costs remain volatile. Rightmove's July index put the average London asking price at £676,248, down 1.6% month on month and 1.2% annually. Homes were taking an average of 70 days to secure a buyer, while national supply remained close to a 12-year high for the time of year.

That does not automatically make every property a good investment. The opportunity depends on the purchase price, achievable rent, finance costs, tax and your holding period.

What the London numbers say

Official sold-price data show similar weakness. The ONS recorded an average Wandsworth house price of £660,000 in May 2026, 6.1% lower than a year earlier. Across London, prices fell 3.7%, with Inner London down 5.9% and Outer London down 0.3%.

Local fundamentals still differ considerably, which is why Wandsworth's regeneration story still holds up for investors when assessing individual neighbourhoods.

Borrowing costs remain unpredictable

The Bank of England maintained Bank Rate at 3.75% on 30 July 2026 by a 6–3 vote, with three members preferring an increase to 4%.

Rightmove’s July report showed an average two-year fixed residential mortgage rate of 4.92%, but market rates subsequently moved higher. Moneyfacts reported an average two-year fixed rate of 5.63% in early August. Buy-to-let rates have also been volatile: the average two-year fixed BTL rate rose from 4.66% on 1 March to 5.44% on 1 April.

See what July's mortgage rate moves mean for buyers and this piece on cooling mortgage approvals before setting your budget.

The maths on a £600,000 purchase

For an individual landlord already owning another residential property, an illustrative purchase could look like this:

Item	Illustrative figure
Purchase price	£600,000
SDLT at higher additional-property rates	£50,000
25% deposit	£150,000
Cash before legal and survey fees	£200,000
£450,000 interest-only mortgage at 5.4%	£2,025 per month
Average Wandsworth rent, June 2026	£2,611 per month
Indicative gross yield using borough average rent	5.2%
Rent less illustrative mortgage interest	£586 per month

The £50,000 SDLT figure uses the current higher rates for additional residential properties in England. See how stamp duty works for local buyers.

The £2,611 rent is a borough-wide ONS average rather than an estimate for a specific £600,000 property. Wandsworth rents rose 3.7% in the year to June, compared with 2.2% across London. Use the rental yield calculator with property-specific figures before making an offer.

Lets Find A Home’s full management service is advertised at 13%, with no VAT currently charged. At £2,611 rent, 13% is approximately £339 per month, before maintenance, voids, insurance and tax.

Rents will not rescue a poor purchase

London rent growth is now the lowest of any English region, so relying on rapid future increases is risky. Our Q3 rental market update covers current tenant conditions.

Since 1 May 2026, landlords generally have to use the revised section 13 process for rent increases, with at least two months’ notice and no more than one increase a year. See one properly served review a year.

Selective licensing also applies from April 2026 in East Putney, West Putney and Northcote, so check the licensing requirements before you exchange.

Frequently asked questions

Is now a good time to buy a buy-to-let in London?

It can be a good time to negotiate, but whether a purchase works depends on the specific price, achievable rent, mortgage terms, tax position and expected costs.

Will London property prices fall further in 2026?

No one can predict short-term prices reliably. Current asking-price and completed-sale data show weakness in London, but that does not guarantee further falls.

How much SDLT is payable on a £600,000 second property?

Under current higher residential rates in England, an additional £600,000 property generally attracts £50,000 of SDLT, subject to the buyer’s circumstances.