The UK property market has been a hot topic of conversation in recent months, with many people wondering what the future holds.
We will get into that, but first let’s take in a very quick review of quarter 1 in 2025.
It would be fair to say that the first quarter of 2025 has been a mixed bag for the UK property market.
Property prices in general have continued to rise, but at a slightly slower rate than in previous years and with regional variations.
However, the good news is that, on average, property prices are now at +1.8% inflation compared to a year ago.
The rental market has also been mixed. Rents have continued to rise in some areas, (particularly in the North of England), but they have fallen in others.
This fall in some regions is due to a number of factors, including an increase in the number of properties available for rent and a decrease in demand from tenants.
Looking Ahead
Although there are disruptive forces at work in the global economy, the UK property market has remained very resilient and looks set to deliver further growth in rental and capital values this year.
Demand for homes, whether for purchase or for rent, continues to exceed the available supply, and although affordability constraints have acted to dampen price growth, particularly in the South of England, they appear to be easing.
Consequently, market surveys indicate growing optimism.
This is not to say that conditions will be unfirmly positive, of course; some regions are clearly delivering better returns than others, and results also vary by property type, tenure and other variables.
Careful research is therefore essential, but investors can at least feel confident that the general climate for property investment in the UK is slowly improving for a number of reasons:
- Market sentiment is generally positive
- Average earnings are continuing to rise faster than inflation
- Interest rates look likely to fall this year
- Price growth continues to be strongest in the UK’s more affordable markets
- Rental values are still rising faster than inflation
- Average yields are comfortably exceeding inflation in all UK regions
Overseas Buyers
More overseas buyers are continuing to look beyond London for better value and increased returns. In Q1 2025, the number of international applicants targeting the North of England in has doubled compared to 2015.
And beyond that, Liverpool has emerged as a specific northern hotspot, attracting nearly half (49%) of all international interest in the region this year. With the majority of those making enquiries eyeing investment opportunities.
However, the North West of England in general, Birmingham and the Yorkshire region have all seen large rises in overseas enquiries since the start of 2025.
Conclusion
Despite the disruptive global influences and some UK governmental changes in buy-to-let legislation, everything that the UK offers, combined with the country’s robust legal system, continues to attract money from international investors looking to buy properties that will provide good returns, in both yield and capital, in 2025 and beyond.
For further information about our current selection of UK investment opportunities, please do not hesitate to talk further with us.
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