London leads demand rebound as housing supply rises

Homebuyer demand picked up in February as falling mortgage rates drew more people back into the market, with London accounting for much of the increase.

That’s according to Connells Group, which enjoyed new applicant registrations rising by 1.5% year-on-year across Great Britain.

The activity makes it the strongest February for buyer demand since 2022.

In the capital, registrations were up 8% on the year and now sit 35% above February 2019 levels.

Outer London drove much of that movement, up 11%, while inner London increased by 5%.

Falling rates boost

The group’s research director, Aneisha Beveridge, said: “Falling mortgage rates at the start of the year gave the market a boost in February, particularly across the less affordable parts of Southern England where confidence had been most fragile surrounding the Autumn Budget.

“London saw the largest increase in demand, driven predominantly by first-time buyers seeking homes in the suburbs.”

She added: “But even as demand improves, stock levels are also high.

“There were more homes on the market last month than in any February over the last decade, which is good news for buyers and will keep a cap on price growth in the coming months.

“At the same time, wider economic inflationary risks are mounting.

“If they persist, the path for mortgage rates may prove bumpier than expected, which could in turn temper the pace of recovery as we move through the year.”

Registrations up regionally

Branch activity also edged higher across the South East and South West, where registrations rose by 7% and 4% respectively.

Yorkshire and the Humber moved in the opposite direction, recording a 16% fall in applicants compared with a year earlier.

The shift follows weaker activity after last year’s Autumn Budget, with lower mortgage rates at the start of 2026 feeding into February’s figures.

Housing stock up

Stock levels rose despite a slight fall in new listings, down 1% year-on-year, leaving total availability 3% higher than a year earlier.

Compared with February 2019, the number of homes on the market is now 52% higher.

Regionally, the North East recorded the largest increase in stock, up 25% on the year, and London followed with a 15% rise.

The East of England and North West posted small declines of 3% and 2%.

Longer to sell

New listings in early 2026 attracted more engagement and by early March, 90% of homes launched in January had received at least one viewing, while 50.1% had secured an offer.

A year earlier, the figures stood at 86.4% and 48.2%.

Even so, properties continued to take longer to sell with homes going under offer in February typically being on the market for 50 days.

That’s four days longer than the same point last year and in line with the slowest February since 2013.

A large share of agreed sales involved older stock with 54% of homes sold in February having been first listed in 2025, rising further to 66% in London.

Across England and Wales, 66% of homes sold below their initial asking price in February, down from 71% in the final quarter of last year with an average discount falling to 4.4%, from 5.6%.