26th February 2026
10mins
The property market works from the bottom up and 2026 marks the return of a vital component: the first time buyer.
Novice buyers were responsible for 48.3 per cent of sales in London during January, according to Connells Group, up from just 22.4 per cent a decade ago, and the highest first time buyer share in the country.
As a note of caution, part of the reason for the first time buyer surge is that, with fewer existing owners moving on, the dominance of first time buyers is more about an uptick in market share than in actual numbers.
Nonetheless, the fact that first time buyers are back is good news for the market – as demand for starter homes grows, so owner-occupiers will be encouraged to move up the property ladder.
“If first time buyers are back, it could have a very positive impact on prime outer London markets,” said Camilla Dell, managing partner of Black Brick. “Any improvement in confidence is a good thing.
“We have noticed that these buyers are waiting for longer, saving up, and moving straight into family houses when they are in their thirties. “They are looking at places with good schools and transport amenities, and they have budgets of £1.5m to £2m.”
Underpinning the increase in first time buyers, is a raft of positive economic metrics which have emerged over the past few weeks. UK inflation has fallen to a ten-month low of three per cent, and is on track to hit the Bank of England’s two per cent target within months. The Bank of England cut base rates to 3.75 per cent in December, and is likely to cut again within the next month or two, which should help stimulate demand.
The sale of a penthouse at the prime Park Modern development on the northern fringes of Hyde Park, is remarkable on two counts.
Firstly, at north of £50m, it is the biggest deal to be inked in London for almost 18 months. Secondly, the penthouse property is the most-expensive ever property to have been sold on the less-favoured north side of Hyde Park, according to developer Fenton Whelan.
The property’s new owner is reported to be Igor Babushkin – a tech billionaire with such a low social media profile that even his age and nationality are not known.
Babushkin, who co-founded xAI with his friend Elon Musk, scored a solid discount for the property, which was listed for £60 million. He paid £57 million for the property, a price which will include its fit out.
Bayswater has, traditionally, been the ugly duckling of PCL. “The area is blighted by the station, and by proximity to the Edgware Road, which is really busy,” said Tom Kain, a partner at Black Brick. “There is also a large council estate there, and Queensway, the high street, is very scruffy.”
Yet Bayswater also has some major plus points. Its central location, its proximity to Hyde Park, and the quality of its period housing stock. “The flats which overlook Hyde Park are some of the nicest in London,” said Kain.
Back in 2014, when Prime Central London was booming, Bayswater had an average sale price of £1.5m, according to estate agent Hamptons.
A mile or so away, in Knightsbridge, property was trading for an average of £3m, while properties in Kensington, also on the south side of Hyde Park, sold for an average £2m.
But after a torrid period during which average prices across PCL have actually fallen, Bayswater is beginning to close the gap.
Over the past five years Bayswater’s prices have jumped 21 per cent to an average of £1.7m.
Knightsbridge and Kensington have both seen substantial price falls since 2022, down 15 and 12 per cent respectively, to £2.6m in Knightsbridge, and £1.8m in Kensington.
“I think what has happened, is that people looking for value for money, have found Bayswater,” said Kain.
The arrival of super prime developments like Park Modern and The Whiteley London, a reboot of London’s first department store, are also helping rebrand Bayswater. “It gives comfort to everybody buying in the area, that there is significant development and investment coming to the area,” said Dell.
She points out, however, that gentrification can be a long, slow road and feels the Park Modern penthouse might have been too rash. “With £57m to spend, that is not where you should buy an apartment,” she said. “You could have been in prime, prime Mayfair for that money.”
The great race for space was one of the most compelling stories of the pandemic years, as people based in cities rushed to find themselves a new home in the country or by the coast.
Cornwall and Devon were a particular focus for buyers, often from London, and competition for coastal homes was frenzied in between 2020 and 2022. Cornwall overtook London as the most popular search destination for property buyers on property portal Rightmove during this period while, according to research by Savills, average prices in prime coastal markets, including Devon and Cornwall, jumped 15.6% in 2021 alone.
But by the end of 2022, interest rate rises and a return to the office, were dampening demand and prices began to fall.
This year, Savills is forecasting greater stability, with 1.5 per cent price growth across prime markets in the south of England, and 17.6 per cent growth by 2030. And Rupert Stephenson, Black Brick’s regional director for the West Country, can already feel the difference – Black Brick’s client roster has jumped by 150 per cent so far this year.
“We have had a significant uptick in enquiries and new clients,” said Stephenson. “The market has been subdued for 18 months to two years, but now that the budget is over with, they are coming back.”
He believes that in the run up to 2022, prices in the West Country simply grew too fast to be sustainable. “You could buy the same Georgian rectory in Hampshire as you could in Devon, it needed a price adjustment.”
That has now happened, and buyers are once again being tempted by the beauty of the west. Black Brick’s clients are all domestic, with young children and looking for a mixture of main and second homes in the region. “People have not been active for a couple of years, and now they want to get on with their lives,” said Stephenson.
Instructions are increasing, the amount of stock on the market is mounting, and discounting is rife. Anybody seeking a home in Prime Central London right now has plenty of choice and the power to bargain hard.
“This is the best buyers’ market we have seen in ten years,” said Kain.
According to property analyst LonRes’s latest report on the state of the London market homeowners have come out of the woodwork following the holidays – and as a result, overall sales instructions are up two per cent compared to the start of 2025. The total amount of stock on sale is up 8.3 per cent.
This trend is particularly marked in the £5m-plus market, where the number of new instructions is up 12.5 per cent.
“Owners have a bit of confidence in the market post-budget,” explained Dell. “They have been waiting around for a couple of years and feel that now is the time.”
Vendors are also becoming more realistic about the state of the market, and the number of homes which have had at least one price discount is up 13 per cent year-on-year, with owners knocking an average 10.3 per cent off their original asking price in search of a buyer. More than half the homes sold in January had had at least one price cut.
Despite this, transaction numbers are failing to rebound from the historic lows of the past few years. There were 30 per cent fewer transactions in January than there were a year earlier, and 20 per cent less than in the 2017 to 2019 (pre-pandemic) January average.
In the £5m+ market, transactions were seven per cent down, compared to January 2025.
Dell blames buyer reticence on a whole series of factors, starting with Brexit, which has stemmed the international market. High buying costs are another deterrent, while the sundowning of the Non Dom tax regime, has triggered an out migration of millionaires. According to Henley & Partners, 16,500 wealthy residents have quit the UK because of the tax change.
The next election is three years away, but the main political parties are already setting out their stalls.
On a visit to a Surrey estate agent last month, Conservative leader Kemi Badenoch reiterated her commitment to scrapping Stamp Duty, in order to boost home ownership and revive the housing market.
It could also have a seismic impact on the PCL property market where, currently, an international buyer spending £5m on a second home in London would pay almost £900,0000 in tax to the Government.
“Stamp Duty is set at crazy levels at the higher end of the property market,” said Dell, who believes buyers at all levels are being deterred from moving by the prospect of a hefty tax bill. “People are moving less, which means there is less money in the economy, and less people are working.
“The property industry is an important part of the UK economy and Stamp Duty is a barrier to the volume of transactions. The market is being choked by excessive levels of Stamp Duty, and something has to change.”
We were hired by an investor seeking a central London rental apartment which might, one day, be used by their family.
They needed a property which was well-priced, and which would rent well.
Our original brief was to find two separate one bedroom homes, but we suggested our client look at a well located apartment in Marylebone instead because of the excellent value it offered and because there was potential to add value to it.
As well as finding the property, we appointed a trusted contractor to provide a comprehensive breakdown of its refurbishment costs, which confirmed that the property was not only good value for money, but would attract a healthy rental yield and future capital growth.
With our client on board, we negotiated an 11 per cent discount on the asking price. Our client paid just over £1,000 per sq ft for the 1,073 sq ft flat.
Our client was keen to buy a second home in the Cotswolds, but wanted a spacious low-maintenance property that would not require renovation or significant ongoing maintenance.
That meant that one of the region’s historic stone houses was not going to suit, and instead, Black Brick found a box fresh 6,000-plus sq ft newly built house, which was being offered for sale discreetly off market.
The property has six bedrooms, fantastic entertaining spaces, a swimming pool, and lake views. Our client particularly liked the fact that it is within a gated development with security, concierge services, and an on site spa and restaurant.
We were able to find out about the property through our network of contacts and gave it a very thorough once over, to ensure it had been built to the highest of standards.
We went on to negotiate to buy not only the house but all its furnishings, which saved our client both time and money.
We would be delighted to hear from you to discuss your own property requirements. For a non-obligatory consultation, please contact us.
