March Market Brief - London drives demand rebound

• Buyer demand is turning a corner, with applicant registrations rising 1.5% year-on-year in Great Britain - making it the strongest February for new applicants since 2022 (chart 1).
• London led the rebound, with registrations up 8% on last year and now 35% above February 2019, driven by an 11% increase in Outer London (chart 2).
• More homes are on the market than in any February in the past decade, with stock levels up 3% year-on-year and 52% higher than in 2019 (chart 3).
• Early 2026 listings are attracting more attention, with 89.7% receiving a viewing and 50.1% receiving an offer, up from 86.4% and 48.2% for homes launched in early-2025.
• Improving affordability has narrowed discounts, with 66% of homes in England & Wales selling below the initial asking price last month - the lowest share since March 2025 - and average discounts easing to 4.4% (chart 4).

Aneisha Beveridge, Research Director at Connells Group, 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.

“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.”

Applicant demand rebounds, led by renewed interest in London

Chart 1

Connells Group data shows that last month was the strongest February for new buyer registrations since 2022, with the number of people looking to purchase a home rising 1.5% year-on-year across Great Britain (chart 1). This suggests confidence is beginning to return following the slowdown triggered by last year’s Autumn Budget.

London led February’s recovery. Across Greater London, applicant numbers were up 8% on last year and now sit 35% above February 2019 levels (chart 2). Outer London drove much of this improvement, with registrations increasing 11%, while Inner London posted a 5% rise – its largest year-on-year increase since September 2025.

Elsewhere, the South East and South West also saw demand return, with applicant registrations rising by 7% and 4%, respectively (chart 2). It’s the Southern markets, where prices tend to be higher and affordability is most stretched, that are likely to benefit most from lower mortgage rates.

Beyond the South, the picture was more mixed. Yorkshire & The Humber, one of the stronger markets in recent years, recorded the biggest decline in any region with a 16% year-on-year fall in applicants (chart 2).

While the number of sales agreed across Great Britain remained 3.8% down year-on-year in February (chart 1), this is an improvement on the deeper declines recorded in January. Historically, increases in applicant demand take time to feed through into agreed sales. 

Chart 2

A market with more choice as stock continues to build

Despite the number of new homes coming onto the market edging down 1% year-on-year across Great Britain in February, the total number of available properties continued to rise. Stock levels were 3% higher than a year ago, and there were more homes available to buy in February 2026 than in any February over the past decade (chart 3). This predominantly reflects how last year’s slower market left properties sitting on the market for longer.

When set against a more normal pre-pandemic benchmark, such as 2019, the scale of the change becomes more telling. Across Great Britain, there were 52% more homes for sale in February 2026 than in February 2019 (chart 3).

Regionally, the North East recorded the sharpest increase in stock, up 25% year-on-year. London saw the second-largest rise, with 15% more homes available to buy than last February - a reflection of how sensitive the capital was to Budget-related uncertainty, which slowed demand. Meanwhile, the East of England (-3%) and the North West (-2%) were the only two regions where stock levels were lower than last year.

Chart 3

New listings see higher engagement, but the market is still clearing 2025’s backlog

There are signs that 2026 is shaping up to be a stronger year for sellers than 2025. By early March, 89.7% of homes which came onto the market in January 2026 had received at least one viewing, and just over half (50.1%) had received at least one offer. These figures are up slightly from 86.4% and 48.2% respectively for homes which came onto the market in January 2025.

By contrast, 88.6% of homes that came onto the market in January 2021, one of the strongest markets since 2007, had received a viewing by early March of the same year, while more than two-thirds (67.0%) had received an offer.

However, greater choice and weak demand late last year mean homes have taken longer to sell. In February, the average property going under offer had been on the market for 50 days – along with 2024, the joint slowest February since 2013 and four days longer than a year ago. A large part of this stems from the quieter conditions in 2025, when Budget-related uncertainty and slower demand led many homes to linger on the market for longer than usual.

That backlog is now flowing through into agreed sales. Across Great Britain, 54% of the homes that sold in February were first listed in 2025, a sign that last year’s older stock is finally going under offer. The effect is even more pronounced in the capital, where 66% of homes sold in February were first listed last year. London’s market was particularly sensitive to the Autumn Budget, and the higher proportion of older listings now selling reflects both the build-up of stock through late 2025 and the gradual improvement in demand in early 2026.

Discounting narrows as affordability improves, but prime markets remain sensitive

Improving affordability has begun to filter through into the scale of discounts, with fewer homes requiring a price reduction to secure a buyer. Across England & Wales, 66% of homes sold below their initial asking price in February, the lowest share since March 2025 and down from 71% in Q4 2025 (chart 4).

The average discount in February stood at 4.4%, a noticeable reduction on the 5.6% average agreed in Q4 last year, when confidence was weaker, and sellers were more willing to negotiate.

Chart 4

The picture varies sharply by price point. Prime markets remain the most sensitive, with the typical £1m+ home selling at 8.3% below its initial asking price last month, the largest February discount recorded since 2019. Some of this discounting pressure stems from the newly introduced mansion tax, which some buyers are using as a negotiating tool to achieve lower values.

By contrast, homes priced between £250k and £500k remain the most resilient, with an average discount of 3.8%. These properties often appeal to first-time buyers and second steppers - groups that have benefited most from the recent improvement in affordability and the slight easing in mortgage rates.