The property market has had its share of turbulence in recent months – or indeed, years.
I’m not sure there ever really have been halcyon days – not truly. The UK property market seems to roll from crisis to recovery and back again with almost predictable frequency. In fact, what we often experience are a series of consequent mini-crises, which crowd together within a short enough timeframe to feel era-defining, where alone they might merely be a small footnote of an article in the FT.
But small, negative events together compound to tell the story of a crisis, and once the market hears it, it can feel almost like it self-immolates – the process of killing oneself intentionally by fire. But the point there, almost lost in that last sentence, is that it can feel like that is what is happening, based on the headlines you see, the news stories that follow, propped up by the other negative news stories that compound the issue at the same time. The truth of things is always more nuanced.
History tells us that things get better, borrowing gets easier, conditions improve and activity surges again as a result – for a period, until the pattern repeats. It can feel like a rollercoaster for estate agents, like us here at Petermans, as we live and breathe this Herne Hill market every day. But at least we’re already strapped in. For the SE24 home-buying and home-selling public, you’ve got to choose what moment to jump on the rollercoaster whilst it’s still moving.
Rising interest rates, high inflation, stretched affordability, and a broader sense of economic uncertainty all leave their mark on buyer and seller behaviour alike. For many, the instinct has been to wait, to hold off on decisions until the picture becomes clearer.
But when it comes to the property market, it is a rare thing for clarity to arrive cleanly on the scene. Nobody is there ringing a bell that signals when the right moment to buy, sell, or let is upon us. What we get instead are signals. Some are subtle, some more legible than others. Some come in like a wrecking ball, and all you can do at first is stand back and assess what’s left in the debris afterwards.
Reading the Herne Hill Property Market Tea Leaves
It’s for estate agents like ourselves to help you read the signs, if you’re on the home-moving journey; to aid you in your decision-making, and to enable you to take whatever your next step might be with confidence about that decision.
There hasn’t been that wrecking-ball moment during this latest period that has indeed shaped up to be one of those property market ebbs. Easy headlines might talk of a crisis and often pin the blame on the single most transformational event to have affected the economy in the first half of 2026 – the escalation of hostilities in Iran. Well, they say all roads lead to Rome, but even the Romans got to Rome from somewhere else. There is a reality that, though that particular event was seismic, caught markets off guard and has no doubt contributed in large part to the shape of markets, which has a knock-on effect on housing market activity, the downturn happened because the overall market was in fragile shape, just on the ascending slope of an upturn at the time following another period of low market activity.
Nonetheless, it meant that those budding green shoots we’d just started to all get excited about through January and February were trampled. But they didn’t necessarily die. In year-to-date terms, it has left the market in a curious position, but not by any means a disastrous one when you look at the numbers. New listing numbers, for example, are actually a little higher year-to-date than last year – so that shows intent from sellers is just as high as ever, given that 2025 was a record year. In real terms, that is over 825,000 new listings across the country. Here in Herne Hill, by analysing Dataloft figures we can see how this has played out, with for sale numbers locally rising month by month since December 2025, from 219 homes then to 277 available now. In fact, over 12 months, we have seen 557 homes listed locally – well above the three-year average of 519. That is positive.
Sales numbers are down, on the other hand – and that sounds less positive. But it is still not the disaster you might feel, implied by many headlines. Gross sales are almost 6% lower year-to-date overall, exchanges almost 8% down (as far as April 2026).
But we have to remember, comparing like for like, 2025 was not a normal year – it was heavily weighted towards sales occurring in the first quarter of the year, ahead of the end of the stamp duty holiday on March 31. Statistics on their own don’t tell us everything – and they don’t often tell you anything without context.
Which means we’re on the lookout for context, when it comes to advising our local marketplace, and those subtle signals I mentioned earlier can sometimes help us find it.
What is interesting right now, is that one of those subtle signals is coming from buyers themselves.
Shorter fixes, deliberate choices
Data from Moneyfactscompare.co.uk shows a marked and sustained change in how buyers are approaching their mortgage decisions – and this is one signal worth our attention, because purchasing activity that leads to what we might consider a more stable, even rising, market is often driven by market confidence. That is what we are seeing.
In February, just under half of users comparing mortgage products on the site were looking at two-year fixed-rate deals. By May, that figure had climbed to more than half. Over the same period, interest in five-year fixes fell steadily and noticeably, while demand for ten-year products continued its own quiet decline.
Taken at face value, this might look like straightforward rate-chasing – buyers hunting for the cheapest deal available. But, not to repeat a phrase I use all too often in these articles, the data tells a more nuanced story.
In May, the average two-year fixed rate was marginally higher than its five-year equivalent. Borrowers choosing the shorter fix were not doing so because it was cheaper. They were knowingly paying a small premium to keep their options open.
That is a deliberate choice, and it deserves to be read as one. Because it signals a growing expectation amongst the buying public that property market fortunes are more likely than not to change for the better in the near term.
A bet on the future
When a buyer opts for a two-year fix over a five-year deal, accepting a slightly higher rate in the process, they are making a judgement call about where the market is heading. The logic is straightforward: if rates fall meaningfully before the two-year term is up, they will be well placed to refinance onto something more competitive. If they had locked into five years at today’s rates, they would miss that opportunity entirely.
Adam French, head of Consumer Finance at Moneyfactscompare.co.uk, framed it like this: borrowers appear to believe the recent spike in mortgage rates will prove temporary, and many are positioning themselves for a future where rates are lower than they are today. The continued fall in demand for ten-year fixes reinforces the point. Borrowers want the security of a fixed monthly payment – that much has not changed – but they are reluctant to commit to current rates for the long term.
We might call it wishful thinking, or we might call it strategy. It reflects a genuine reading of the economic environment, and it is a reading that a growing number of buyers are acting on with their own money.
Confidence returning to the Herne Hill Property Market
It would be easy to overlook this change, or to file it under mortgage market technicalities. But there is something more meaningful here for anyone watching the property market closely.
Buyers are not sitting on the sidelines waiting for certainty. They are making active decisions – committing to purchases, arranging finance, and structuring their borrowing around an expectation of improvement. That is a form of confidence. It may not be loud or dramatic, but it is real, and it is being expressed in one of the most consequential financial decisions most people will ever make.
In Herne Hill, we are seeing this playing out. Transaction numbers themselves are down, and we know that – in fact, over 12 months, they are 41% lower than they were in the previous year. But in the meantime, house prices themselves have largely held up. The average sale price is 4% lower over the same period on a per-square-foot basis. It’s a drop, certainly, but prices still remain higher over a five-year period – and what is more encouraging is the activity in the entry-level market. Flat sales have now made up 78.9% of transactions locally recently, which is a convincing signal that those buying with mortgages are more active.
Mary-Lou Press, president of NAEA Propertymark, offered a timely note of caution alongside her own reading of the trend. Rate expectations alone, she rightly pointed out, should not drive mortgage decisions. Affordability, personal circumstances, future plans, and the potential costs of exiting a deal early all remain essential considerations. Professional advice matters more than ever in a market that is still finding its footing. These are not decisions to be made on the basis of a forecast alone.
But she also acknowledged what the broader trend reflects: a housing market in which confidence is improving. Buyers feel comfortable making long-term property decisions without feeling compelled to lock themselves into a mortgage product for five or ten years. They are, in other words, prepared to move, and they are moving on terms that leave them room to benefit if conditions improve.
What this means in practice
Sentiment is a genuine force in property. When buyers begin to act on optimism rather than anxiety, the effect does not stay contained to the mortgage market. Viewings pick up. Decisions that had been deferred come back into play. Chains that may have stalled begin to move again.
We are not yet in a period of uncomplicated good news. Affordability remains stretched for many, and the wider economic picture continues to affect us all. But in the behaviour of buyers choosing a shorter mortgage term, paying a little more now for the flexibility to do better later, there is certainly something worth noting.
I talked about the sense you can get of a market self-immolating. There is another word that might be better used to describe it: autophagy. An odd word, perhaps, little used, but it means ‘self devouring’. That might sound like destruction, but it is actually natures method of cleansing and renewal – and that seems a much better way to describe the market, as it reaches these lower ebbs and sets itself up for its next period of recovery.
It is a quiet vote of confidence in what comes next. And in a market that has been short of those recently, it’s worth us ringing the bell to signal it.