A large franchise chain is predicting a more stable year when it comes to the Prime Central London market.

A report by Winkworth says: “Prime Central London remains a long-term store of value.

“Those who approach 2026 with clarity and professionalism, rather than waiting for perfect macro conditions, are likely to be rewarded. 

“The message from our offices is clear: this year favours preparation over speculation.”

Winkworth says anticipated interest rate cuts will help, with forecasts pointing to 3.25% by year-end. 

This will particularly help mortgaged buyers in the £1m to £3m range.

The report continues: “Many anticipate prime central London prices to be flat to marginally positive, a year of consolidation rather than recovery. 

“Rental growth is expected at a modest 2% to 4%, constrained by affordability but supported by undersupply. 

“For landlords committed to the sector, yields near multi-year highs keep the investment case intact.

“The Renters Rights Act takes effect on May 1 … There will be friction, but professional landlords in the prime market are better placed than most to absorb the transition.

“The international buyer remains uncertain. The abolition of the non-dom regime, accumulated stamp duty surcharges, and the incoming high-value levy have changed the economics for overseas purchasers. 

“Some will return as prices stabilise; others have permanently redirected capital elsewhere. For now, domestic owner-occupiers are the market’s engine and 2026 will be shaped by their confidence and capacity to act.”

The agency’s full outlook is here: https://www.winkworth.co.uk/articles/winkworth-prime-central-london-market-update-2025-review-and-2026-outlook