Current Status: Mortgage rates have eased from their 2023–2024 peak following the Bank of England base rate cut to 3.75% in December 2025. London house prices remain uneven across boroughs, with affordability pressures still present but buyer competition materially lower than in recent years. For first-time buyers, 2026 is shaping up as a more negotiable and less rushed market.

One of the most common questions being asked by younger London buyers is simple: Is 2026 a good time to buy property in London for first-time buyers?

The short answer is that 2026 may be one of the most balanced entry points first-time buyers have seen in several years — but only for those who approach the market with realism rather than urgency.

London is no longer operating as a fear-driven market. Instead, it is moving into a phase where affordability, stability and long-term practicality matter more than speed. For first-time buyers, this shift changes the rules.

Why 2026 feels different for first-time buyers

Between 2020 and 2023, many first-time buyers were competing against record-low mortgage rates, investor demand and time pressure. That environment priced out a large proportion of households.

By contrast, the 2026 market is defined by slower transactions, more cautious lending, and sellers who are realistic rather than optimistic. This matters because first-time buyers tend to benefit most from markets where negotiation replaces competition.

While borrowing is still more expensive than during the ultra-low-rate era, price expectations have adjusted. In practical terms, this means first-time buyers are often negotiating on price, condition or incentives — something that was extremely difficult in previous cycles.

Affordability has improved, but limits still exist

Affordability in London has improved slightly as mortgage rates have eased and wage growth has continued. However, this improvement is uneven and highly dependent on location, property type and deposit size.

For most first-time buyers, the constraint is no longer just monthly repayments, but total exposure. Buyers are more sensitive to service charges, energy costs and future works, particularly when budgets are already stretched.

This is why many first-time buyers in 2026 are prioritising simpler, lower-risk properties rather than chasing maximum size or prime postcodes.

Flats, houses and the first-time buyer dilemma

First-time buyers are often deciding between smaller houses in outer zones and flats in better-connected areas. In 2026, this decision has become more analytical than emotional.

Flats can still make sense for first-time buyers, particularly where buildings are compliant, service charges are transparent and energy performance is strong. However, buyers are increasingly cautious about ongoing costs and long-term saleability.

Houses, even modest ones, are often perceived as simpler assets. Where budgets allow, first-time buyers are drawn to houses because they reduce exposure to shared costs and regulatory uncertainty.

What first-time buyers should focus on in 2026

The most successful first-time buyers in 2026 are not trying to predict the market. They are focusing on controllable factors.

• Buying within a realistic budget that allows for rate fluctuations
• Prioritising transport links and resale demand over headline postcodes
• Understanding running costs before making an offer
• Keeping a cash buffer after completion
• Avoiding properties with unclear legal or building status

For first-time buyers, the goal in 2026 is not to maximise short-term gain, but to secure stability and optionality for the future.

So, is 2026 a good time to buy for first-time buyers?

For many first-time buyers, 2026 offers something that has been missing for years: time to think. There is less pressure to overbid, more scope to negotiate, and a greater focus on value rather than speed.

That does not mean every buyer should rush in. The decision still depends on job security, deposit strength and long-term plans. But for those who are financially ready, 2026 may represent a calmer and more rational entry point into the London market.

For broader market context, read: Why London house prices are falling and what the system is signalling for 2026 | Should I buy a house in London in 2026?

image: constructionmagazine.uk

Expert Verification & Authorship: Mihai Chelmus Founder, London Construction Magazine