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London Property Market

Insights from Q3 2021

Welcome to our comprehensive guide to the Q3 2021 trends in the London property market. In this detailed analysis, we dive deep into the state of London’s housing landscape during the third quarter of 2021, shedding light on crucial factors like property prices, mortgage rates, and the trajectory of house price growth.

Market Overview

During Q3 2021, occupier take-up witnessed a remarkable surge of 30%, reaching 2.8 million sq ft. This surge was primarily driven by substantial commitments from key London occupiers and projects in the development pipeline. It marked the highest level of occupier activity since the pre-pandemic era, trailing only 7% below the 5-year quarterly average.

The London property market experienced a notable resurgence during Q3 2021, with occupier take-up surging to 2.8 million sq ft—an impressive 30% increase. This surge can be attributed to substantial commitments from prominent London occupiers and ongoing developments. Notably, this level of activity hasn’t been witnessed since the period preceding the pandemic, coming in at just 7% below the 5-year quarterly average.

While the overall central London availability inched up from 9.4% to 9.6% during Q3, the nuances across individual sub-markets paint a diverse picture. Sub-markets like Mayfair and St James’s, Fitzrovia, and Southbank experienced robust occupier activity in Q3, resulting in a decrease in availability. On the flip side, submarkets like Farringdon & Clerkenwell and Canary Wharf continue to grapple with historically high availability.

Investment activity in the London property market surged to an impressive £3.3 billion in Q3 2021, up from £2.8 billion in the previous quarter. Overseas investors dominated this growth, displaying a clear preference for top-tier assets with long leases and diversified tenant portfolios. The heightened global competition for prime London assets suggests the possibility of yield compression in Q4.

London’s property market continued to be a magnet for investment, with Q3 2021 witnessing a substantial rise in investment activity, reaching £3.3 billion compared to the previous quarter’s £2.8 billion. Overseas investors played a pivotal role in driving this surge, displaying a strong inclination toward premium assets featuring extended leases and diversified tenant bases. The intensifying global competition for prime London properties suggests the possibility of yield compression in the upcoming quarter.

Buyer’s Guide

For prospective buyers in London, the Q3 2021 market offers a blend of challenges and opportunities. Understanding the nuances of mortgage rates, property prices, and the influence of interest rates is key to making informed decisions.

If you’re considering buying property in London during Q3 2021, you’re entering a market characterized by a dynamic interplay of challenges and opportunities. To navigate this landscape successfully, it’s imperative to grasp the intricacies of mortgage rates, property prices, and the ever-evolving influence of interest rates.

Property Investment

Property investment in London remains an attractive prospect, particularly when considering annual house price growth. However, it’s essential to factor in the cost of living as part of your investment strategy.

Investing in London’s property market during Q3 2021 holds immense potential, especially when considering the ongoing annual house price growth. Yet, prudent investors should also weigh the cost of living as a crucial component of their investment strategy. Understanding this balance is key to unlocking the full potential of property investment in the city.

Key Insights and Recommendations

  • Stay Informed: Keep abreast of market developments, especially mortgage rate fluctuations, to make well-timed investment decisions.
  • Diversify Your Portfolio: Consider diversifying your property portfolio to mitigate risks and capitalize on emerging opportunities.
  • Long-Term Perspective: Take a long-term view when assessing the potential of annual house price growth in London.
  • Cost of Living Analysis: Factor in the cost of living when evaluating property investment returns, ensuring a comprehensive financial strategy.

The Q3 2021 London property market stands at an intriguing juncture, offering a spectrum of possibilities for buyers and investors alike. Understanding the interplay of factors such as property prices, mortgage rates, and annual house price growth is paramount to making informed decisions in this dynamic landscape.

In conclusion, our guide provides valuable insights into the Q3 2021 trends of the London property market. By staying informed and adopting a strategic approach, you can harness the potential of this vibrant and ever-evolving real estate arena.

By the end of September, visits to the workplace had risen to their highest point since before the pandemic following ‘back to school’ initiatives from many employers. As businesses and staff find a new working rhythm, and competition for the best talent intensifies, the office has an important role to play, with our data suggesting that companies are acting decisively to secure high-quality space that fits with their business strategies.

Rhodri Phillips, Partner

London Markets team

Lloyd Davies


Rhodri Phillips


Fergus Jagger


Patrick Ryan


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