MARKET INSIGHT
february market update
February 26, 2026 • Author: Richard Bradstock
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In the old English farming calendar, February was a month of maintenance and readiness; of preparing the land and tools for spring sowing. So too, do we find a similar state of affairs for property investors weighing up the UK and European markets. February is shaping up to be a month of readiness, for investors both small and large, readying their purchasing power. With lending rates continuing to fall steadily, and Saint Paul’s advice ‘for whatever one sows, that he will also reap,’ at the forefront of our minds, sowing the seeds of a property investment now, means reaping solid returns in the medium to long-term, and in certain locations, possibly even the short-term.
Let’s take a look…
Rates at their lowest level since 2022
The current BoE base rate is 3.75%, its lowest level since 2022 and as a result, the choice of mortgage products on the market has risen to its highest level in 18 years. Whilst many outlets rave about ‘a booming mortgage market’ in 2026, we are advising our clients to think more proportionately. The slight December increase in inflation (up 3.4% from 3.2%, although a rise of 3.3% was forecast) suggests less of a ‘boom’ and more of a market stabilisation. Both the Bank of England and the European Central Bank voted to keep the current rates on hold in February, a reaction to the slight uptick in inflation.
If you are speculating on buying a property, banking on rates to come down and therefore putting off any purchases until later on in the year, you may well find this strategy backfiring. Lenders are already pricing in further rate cuts to their products so the kind of interest levels you’re seeing currently on the market will likely be sticking around for the rest of 2026, all the while property prices are creeping up, eroding any marginal savings you were predicting. European markets are not such a matter of timing like it might be in more volatile markets like Dubai, they’re about the hold. Investors want UK real estate assets for their long-term capital appreciation, which when you factor in rental income as well, outperform the equivalent amount invested in the FTSE 100.
At the time of writing, Nationwide’s best 2-year fix was at 3.5% with a max LTV of 60% and a £1,499 fee, whilst Lloyds Bank came in a smidge below at 3.47% on a 2-year fix for existing customers.
Even if you’re the ultimate optimist holding out for better rates to come, engaging with and organising lending now is always prudent. If by the time of purchase, rates have come down you can always renegotiate with your lender.
Good news for property investors in South Africa and Nigeria
Speaking of lending, South Africa and Nigeria’s removal from the intergovernmental Financial Action Task Force’s (FTAF) “grey list” will come as great news to property investors based there. In a major development, South African and Nigerian-based investors can now benefit from improved access to international banking, capital and easier access to mortgage finance.
As ever, we have great relationships with a number of institutional lenders looking to secure finance and mortgages, so please do get in touch with us for a referral. Based on our recent experience of navigating clients recent experience of navigating clients through purchases in Germany with rates as low as4.04% and up to an LTV of 70%.
What London’s historic low of new build stock means for investors…
Everyone’s favourite marketing headline when it comes to the UK capital, London is calling. But we mean this quite literally. Out of all our investable locations we’re seeing the most enquiries for London property we’ve had for years. Why? Because there’s money to be made. New build and rental starts plunged in 2025, registering an 80% fall in the number of construction starts compared with 2024. Only 613 new units were started in 2025 according to the British Property Federation, which in a city with a population topping 9 million, is shocking.
The Estates Gazette reports how regulatory delays, economic headwinds and planning bottlenecks have dampened delivery pipelines across the UK. Whilst The Times writes how sales of concrete in the capital hit their lowest level in 75 years in 2025. As the kids say, the struggle is real. And the ongoing squeeze in supply is likely to last through most of 2026.
Whilst this may be a living nightmare for housebuilders and property developers, particularly those small to medium sized ones, and all businesses associated with the supply chain of the new homes industry, these woes do not translate to investors. In fact, we’re seeing quite the reverse, investors running to the market to buy up what little newbuild stock there is, knowing that in 2-3 years’ time this bottleneck will work its way into the market, producing steep rises in London property values. Such is the dearth of quality new build supply, we may even see the return of a short-term play in London, whilst the long-term gain looks even better than before. Indeed, in early 2026 prices are already higher than they were a year ago with some analysts predicting an average rise of 4% across 2026 alone.
What’s clear in London is that price pressure will begin to assert themselves over the next one to three years particularly in desirable central, and transit connected areas with low teens percentage growth over the next four years by 2030. And unless meaningful increases in delivery are achieved persistent supply shortfalls will be a key upward pressure on property prices over decades where we could see a 20-25% cumulative growth over the next 10 years.
We could not be more serious when we say take a look at our current London new build stock available to buy and get on the phone to your mortgage broker now.
Chart: London supply plunges to its lowest level in decades
Don’t Fancy the UK Right now? What About Berlin…
If you don’t fancy the UK right now, perhaps you already have UK-based assets or you’re holding savings in Euros, then Berlin offers you the same potential, a secure and safe market, and - and this is rather the clincher, no capital gains tax on properties held for 10+ years.
Check out our recent launch of a condominium development Eckert Carre in the east central Berlin district of Friedrichshain, an area showing strong growth potential with strong public transport connections driving its desirability. Competition for rental apartments in Berlin is huge, and like London, its capital counterpart, the city is experiencing a shortage of supply that is putting it firmly in the crosshairs of both institutional capital and individual. In fact, a recent article in The Guardian, commenting on the ‘large-scale ownership and control of homes by financial institutions’ mentioned both Berlin and London.
It quoted one London-based asset manager: “Real estate investors with exposure to European residential assets are the cats that got the cream,” with “housing generating stronger risk-adjusted returns than any other sector.” It stated that 10% of Berlin’s housing stock was owned by international portfolios and that such institutions had little interest in increasing supply because its directly against their interest, as shortages of stock keep the value of their holdings high. We’ve talked before about the importance of tracking institutional investment as it clearly shows the opportunity and money to be made from holding European real estate, be it in London or Berlin. Either way, after a period of retraction in the market it seems activity is picking up steeply in 2026. Now is the time to come out of the shadows and make those purchases.
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About the author
Founder & Managing Director
richard bradstock
RPA’s founder, Richard has worked in residential development investment for 20 years and oversees the general running of the business ensuring the RPA Group retains true to its founding principles. Over his career Richard has built an incredible network of international property investors and like-minded industry professionals.
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