southwest London's property markets have held firm so far, but can they weather the new headwinds?

The housing market in southwest London continues to show more resilience than its prime central London (PCL) neighbours but can it hold on in the face of rising interest rates, the threat of a new more left-wing Government, and several raging wars?

Since 2021, southwest London has been living its best life, benefitting from its predominantly domestic buyer base, meaning it is less susceptible to the discretionary volatility seen in PCL. Buyers are often marking long-term decisions driven by life choices and changes. Whether you’re getting on the property ladder, upsizing to accommodate a growing brood, or looking to move into a school catchment, this is a house move that excites. So, while PCL’s buyer sentiment can wax and wane from a gentle breeze, southwest London buyers and vendors often need a tempest to stop them in their tracks.

This is demonstrated by the fact that PCL values are now circa 22 per cent down on their 2014 peak and circa 4.5 per cent down year-to-date, according to Savills. At the same time, southwest London prices have fallen only marginally, circa 0.5 per cent in the first quarter of this year, reflecting a correction of 1.9 per cent compared to Q1 2025. 

This is not to say that the southwest London market hasn’t faced its challenges – rising interest rates post-Liz Truss were something the market took a moment to absorb and move on from. But can it do it again?

Earlier this year, I found myself going to best bids time and time again on any best-in-class property in the sub-£5m price range, and especially in those key, supply constrained hot spots such as Barnes. Offer levels were ludicrous considering it was a market which, on paper, should have belonged to buyers. However, in the past few weeks, the mood has changed. Are buyers still offering? – Yes. Are buyers still offering fair prices? Yes. Could you still find yourself up against some competition for those best-in-class homes? Absolutely. But that fevered activity has abated. 

Why now, you may ask? I can only put it down to the increasing likelihood of a more left-wing Government and a depleting number of buyers with burning-hot, fixed-rate mortgages on their hands at 3.5 to 4 per cent, who wanted to lock in those attractive rates before their six-month offer period expired.

Expectations of vendors and buyers feel misaligned. For the southwest London market to continue to hold its own, vendors need to take a long hard look at pricing. There is enough demand out there; if you are priced right, you should be getting offers, and good ones. So, if you’re not, sharpen that pencil and do it soon.