London property market update – Asking prices pick up as autumn begins

After a few months of price adjustments, London’s property market had something new to report in September. Asking prices moved upwards again, rising more sharply than the UK average. For buyers in Hong Kong who have been following the market or waiting for the right property to come along, this is a development worth noting.

There is, however, more to the picture than rising prices. A high number of homes remain on the market, giving buyers more options to weigh up before making a decision. Mortgage costs have also increased, which means the numbers need a closer look before committing to a purchase.

Here’s what changed in September and what Hong Kong buyers should keep in mind as the market moves into autumn.

London property prices rise by 1.8% in September

The average asking price of a newly listed home in the UK rose by 0.7% in September, marking the first monthly increase since May 2026. London recorded a bigger rise of 1.8%, adding £11,324 to the average asking price compared with August.

For someone in Hong Kong planning to buy in London, the change comes after several months of price corrections. Buyers who held back earlier in the year may now want to revisit the properties they had shortlisted. However, a rise in asking prices does not necessarily mean that every property is becoming more expensive or that a purchase needs to be rushed.

In fact, there is still plenty of choice. The number of homes available for sale across the UK has reached a 12-year high. With so many properties competing for buyers, sellers may need to be more flexible on price or other terms to secure a sale.

London’s average asking price stood at £657,775 in September, compared with £367,440 across the UK. The difference highlights the premium buyers pay to own property in the capital.

For Hong Kong buyers, the starting point should be deciding what the property needs to deliver. A home for personal use, a rental investment and a property intended for long-term ownership can each call for a different approach to location, budget and property type.

UK property market at a glance: September 2026

• London asking prices: Up 1.8% from August, an increase of £11,324.
• UK asking prices: Rose by 0.7% over the month.
• Homes for sale: Supply reached its highest level in 12 years.
• Two-year fixed mortgage rate: Increased to 5.29%, from 5.09% in August.
• UK inflation: Reached 3.1%, while the Bank of England kept its base rate at 3.75%.
• First-time buyers: Further details of the proposed Your First Home scheme are expected in the Autumn Budget.

Which London boroughs recorded the biggest price increases?

London’s recovery was not uniform across every borough. Among the areas highlighted in September’s figures, Lambeth recorded the strongest monthly increase, followed by Harrow and Croydon.

These figures give Hong Kong buyers a useful starting point for comparing areas with different price levels. But a borough’s monthly price movement tells only part of the story.

Someone buying a property to live in may place greater importance on the commute, schools and everyday convenience. For an investor, tenant demand, achievable rent, maintenance costs and the property’s longer-term prospects may carry more weight.

London remains a major destination for overseas property ownership

London continues to feature prominently among international property owners. Research by Benham and Reeves found that 43% of property titles owned by overseas companies across England and Wales are registered in London.

Of the 91,136 property titles held by overseas companies, 39,172 are in Greater London. The City of Westminster and Kensington and Chelsea together account for more than 37% of London’s share.

For Hong Kong investors looking at the capital, these figures offer some insight into the role London plays in international property ownership. The city has a broad range of options, from established prime residential areas to rental properties and developments in locations undergoing regeneration.

That said, overseas ownership figures should be read in context. They relate to properties registered to overseas companies, rather than every property owned by an international buyer. They also do not tell us whether those properties are generating strong returns.

Your First Home scheme: Does it apply to Hong Kong buyers?

The Autumn Budget scheduled for 28 October is expected to provide more information about the proposed Your First Home scheme. The initiative is intended to help eligible first-time buyers in England purchase a home with a 2.5% deposit, alongside a government-backed equity loan worth 20%.

The proposed loan is expected to include an initial interest-free period. However, the full terms, eligibility requirements and conditions still need to be confirmed.

For buyers based in Hong Kong, one detail is particularly important: the scheme is intended for eligible first-time buyers in England. Purchasing a first property in the UK does not automatically mean an overseas buyer will qualify. Anyone hoping to use the scheme should wait for the official criteria before factoring it into their plans.

There has also been speculation about possible changes to council tax and stamp duty following the Prime Minister’s appointment in July. The government has addressed some of this speculation, but buyers should rely on confirmed announcements rather than make financial decisions based on proposed changes.

Mortgage costs and inflation: What buyers need to consider

Property prices are only one part of the cost of buying a home in London. Borrowing costs also affect affordability, and September brought little relief on that front.

The Bank of England held its base rate at 3.75%, following a 6–3 vote by its Monetary Policy Committee. Meanwhile, UK inflation rose to 3.1% in August, up from 2.9%. It is expected to exceed 4% in the first quarter of 2027.

Governor Andrew Bailey has warned that interest rates could rise if inflationary pressures continue. Higher energy prices linked to the ongoing conflict in the Middle East are among the factors contributing to these concerns.

Mortgage rates have already moved upwards. Rightmove reported that the average two-year fixed mortgage rate reached 5.29% in September, compared with 5.09% in August. Zoopla also reported that mortgage costs for the average buyer had increased by £1,800 since the start of the year.

For Hong Kong buyers financing a London property, these figures are a reminder to calculate the full cost before making an offer. Mortgage repayments are only one consideration. Stamp duty, legal fees, property management, maintenance and periods without a tenant can all add to the expense of ownership.

Currency movements deserve attention, too. If the purchase funds are held in Hong Kong dollars, changes in the exchange rate can affect the sterling amount available for the purchase and the overall cost of transferring money. Buyers should account for this when setting a budget, particularly if they plan to make further payments over time.

Autumn Budget 2026: What property owners should watch

The proposed first-time buyer scheme is not the only property-related issue to watch ahead of the Autumn Budget on 28 October.

Two other proposals attracting attention concern Capital Gains Tax (CGT) and the Mansion Tax threshold. Possible changes include bringing CGT rates closer to Income Tax rates and lowering the threshold for the Mansion Tax from £2 million to £1.5 million.

Neither proposal should be treated as confirmed policy until the government announces its decisions. Their eventual impact will depend on the final rules and the circumstances of each property owner.

For Hong Kong investors who already own UK property, or those considering a purchase, the Budget could have implications beyond the initial transaction. Tax changes may affect the cost of selling a property or the financial calculations behind a planned investment.

It is worth reviewing the announcements once they are published and seeking advice from a qualified tax professional where necessary. The right approach will depend on how the property is owned, the buyer’s tax position and the purpose of the purchase.

Planning your next move in London’s property market

September’s figures show a market that is beginning to move again, but they do not tell the whole story. Asking prices have risen, yet the number of homes available remains high. At the same time, mortgage costs and uncertainty around future tax changes mean buyers still have plenty to consider.

For Hong Kong buyers and investors, this is a good reason to revisit the market with a clear plan. Rather than focusing solely on whether prices are rising or falling, it helps to compare individual properties, understand the total cost of ownership and decide what you want the purchase to achieve.

In September, Benham and Reeves’ Hong Kong team presented property opportunities from Barratt Redrow and Berkeley at its international property events, connecting buyers with developments in the UK market.

If you are considering buying in London, Benham and Reeves can help you explore available properties, compare locations and understand the buying process. Contact the Hong Kong office or one of its London branches to discuss your requirements and find out more about the opportunities available.

Ready to Plan Your Next Move in London?

If you missed our recent Sutton Garden Square Showcase in Central, you can still access our full range of London property services. From exploring new-build developments to navigating mortgages, tax updates, and property management, Benham and Reeves is here to help every step of the way.

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